U.S. lawmakers have proposed a bipartisan bill that will define the term “digital token”, and explicitly excludes such assets from being classified as securities, Law360 reported on 9 March.
Called the Token Taxonomy Act, the bill will not only define digital tokens as “assets whose creation and supply aren’t controlled by a central group”, providing a much needed regulatory clarity. Reintroduced by Rep. Warren Davidson (R-OH) — and co-sponsored by Reps. Darren Soto (D-FL), Josh Gottheimer (D-NJ), Scott Perry (R-PA), and others — the bipartisan bill has also been endorsed by the Blockchain Association, which said in a blog post:
“For the reintroduction today, we’re pleased to see additional lawmakers sign on to this important proposal. We’re glad to see Congress take action to secure and promote the future of open blockchain technology.”
The Token Taxonomy Act was first introduced in December 2018, and contained almost the same key provisions as the current one. The difference this time is the amount of original co-sponsors, which has increased significantly.
This bill was not the only one to be proposed on Tuesday, however. Another legislation, called the “Eliminate Barriers to Innovation Act of 2021”, was also introduced, suggesting the creation of a working group composed of industry experts and representatives from the U.S. SEC and CFTC. The goal of the group would be to evaluate the current digital assets regulatory framework, and clarify if the SEC or the CFTC have jurisdiction over a particular token or cryptocurrency.
If the bill is passed — and the work group created — the group will be required to file a report within a year, analyzing the current regulations and their impact on U.S. markets. The report should also include what future practices should be taken for fraud prevention, investor protection and other issues.