After a long year of haggling, the Token Taxonomy Act of 2019, H.R. 2144, with broad bipartisan support, was introduced as the leading legislation to provide regulatory certainty for businesses, entrepreneurs, and regulators in the U.S.’s blockchain economy.
Authored by Congressman Warren Davidson (OH-08) and co-sponsored by Representatives Darren Soto (D-FL-09), Josh Gottheimer (D-NJ-05), Ted Budd (R-NC-13), Tulsi Gabbard (D-HI-02), and Scott Perry (R-PA-10), the proposed law will clarify the numerous conflicting state initiatives and regulatory rulings, and patchwork of judicial decisions, that have clouded certainty for entrepreneurs and businesses that use blockchain technology.
“The Token Taxonomy Act is the key to unlocking blockchain technology in America,” said US Congressman Warren Davidson. “Without it, the U.S. is surrendering its innovative origins and ownership of the digital economy to Europe and Asia. Passing this legislation, Congress would send a powerful message to innovators and investors around the world that the U.S. is the best destination for blockchain technology. In the early days of the internet, Congress passed legislation that provided certainty and resisted the temptation to over-regulate the market. Our intent is to achieve a similar win for America’s economy and for American leadership in this innovative space. I would like to thank my colleagues for their efforts on this bill including my colleague Darren Soto, a leader on the Energy and Commerce Committee, for his efforts on this bill and his accompanying legislation.”
“As blockchain technology continues to emerge, it is clear that there must be a framework in place that not only provides a much clearer path forward for open blockchain projects, but also will establish the United States as a leading force in this space,” said Congressman Josh Gottheimer. “That is why I am proud to support the bipartisan Token Taxonomy Act and look forward to working with Reps. Davidson and Soto in passing this legislation.”
This need for regulatory certainty is motivating market players to leave the U.S. for the certainty provided elsewhere. China, meanwhile, has endorsed blockchain technology as essential to its digital economy and emphasizes the importance of regulation to a healthy future. President Xi Jinping has said blockchain is ten times more important than the internet was. China is currently leading across the world with the number of underway blockchain-based projects.
Blockchain creates a secure, unalterable public record and is poised to dramatically change the world around us, from voting systems to health records.
“I am excited to introduce this bipartisan bill today with folks across the political spectrum and I want to thank Representative Warren Davidson in particular for all he has done to make this bill a reality,” said Congressman Ted Budd. “His commitment to the development of this technology is commendable and I’m grateful for his leadership in this space. The Token Taxonomy Act will make sure the development of this technology stays in the United States all while promoting better investor protections, capital formation, and innovation. We need big, 21st Century ideas to help grow our economy and innovate for the future. The Token Taxonomy Act is one of those bold ideas.”
“Blockchain technology is fundamental to our future economy,” said Congressman Scott Perry. “Whomever can successfully harness its power will dominate the global economy. Fortunately, the Token Taxonomy Act creates the regulatory environment that allows this technology to flourish, and ensure that our private industries remain at the forefront of this vital innovation. Thanks to my friend and colleague, Congressman Davidson of Ohio, for his leadership on this issue: I urge swift consideration of his proposal.”
Compared to H.R. 7356 in the 115th Congress, the Token Taxonomy Act of 2019 will further clarify the Digital Token definition to be more inclusive of changing technology. Jurisdictions for the FTC and CFTC were also cited to strengthen protections for consumers. While there have been many positive laws concerning crypto regulation, others like New York’s onerous BitLicense law have been heavy-handed. A preemption provision was included to ensure The Token Taxonomy Act provides the certainty innovation needs to flourish.
Click here for bill text.