New US Bill Wants To Classify Digital Tokens As Commodities, Not Securities
- The bill suggests that a token that is an object of an investment contract isn’t necessarily a security.
- Compliance companies with securities registration requirements will allegedly be allowed to distribute their assets to the public without additional regulatory uncertainty.
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On September 24, a new press statement on Congressman Tom Emmer’s website introduced a bipartisan bill that aims to clarify investment contract assets or digital tokens sold as part of securities offering as separate and distinct commodities.
The representative wants to amend existing securities laws to exclude tokens from the definition of security. Currently, token issuing requires an investment contract that must be registered with the SEC. The so-called Securities Clarity Act (SCA) aims to provide a path to regulatory uncertainty for digital assets and other emerging technologies under securities law. According to the statement, the bill will allow compliant companies to “distribute their assets to the public without additional regulatory uncertainty.”
“We have seen regulations hinder the progress of blockchain-based technologies. The development of these vital technologies should not be impacted by government’s inability to adjust,” said the Congressman. “The Securities Clarity Act will allow America to compete in this new advancing space without sacrificing the consumer and investor protections that have made our capital markets the strongest in the world. There are companies that have followed our current rules of the road and managed to navigate our securities regulations. Now, they deserve certainty from our regulators when offering their digital asset to the public.”
At present, the bill has bipartisan support but is unlikely to pass before the upcoming presidential election in November. The introduction of the bill comes along with Michael Conaway’s Digital Commodity Exchange Act (DCEA) that promotes the idea of bringing digital currency exchanges in the US under a single federal framework.
Emmer’s bill seeks to further clarify the status of any asset sold as the object of an investment contract by proposing a new definition of an “investment contract asset”. This new term will refer to any asset sold as part of an investment contract that is not considered a security.
- The new bill would require stablecoin issuers to secure bank charters and federal approval prior to issuing.
- The STABLE Act, however, has low chances of passing this year, as there are only a few weeks left of the current Congressional session.
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- The bill will supposedly allow crypto exchanges to operate in the entire US under a single license, rather than applying in 49 states separately.
- While the SEC is currently responsible for the oversight of ICOs and token pre-sales, the introduction of the act might cause a shift in the status quo.