Representative Warren Davidson [R-OH] has once again introduced the Token Taxonomy Act [TTA] on the 9th of March. By reintroducing TTA, which is endorsed by the Blockchain Association the US lawmakers reportedly intend to define the term “digital token” and isolate it from the definition of a security.
The official release stated that the bill establishes much-anticipated clarity for businesses, consumers, and regulators operating in the flourishing blockchain ecosystem of the country
The Ohio congressman’s tweet announcing the same read,
“It’s time for Congress to give this emerging industry the clarity it needs to continue changing the world with Blockchain.”
The co-sponsors of the bi-partisan bill include Rep. Darren Soto, Rep. Josh Gottheimer, Rep, Ted Budd as well as Rep. Scott Perry.
Talking about how the US will be left behind if it does not take up the issue of providing the ecosystem with the much-needed clarity, Rep. Davidson stated, that “the window is closing” and went on to add,
“Other countries have found ways to regulate blockchain projects and, in doing so, have made themselves more attractive to entrepreneurs. By establishing the appropriate regulatory environment, we can make sure that the opportunities and advancements that blockchain innovation promises will happen here in the US, for the benefit of Americans.”
A little History On The Token Taxonomy Act
The Token Taxonomy Act seeks to amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to exempt crypto tokens from the definition of a security.
The latest move is the third attempt by Rep. Davidson. The Token Taxonomy Act was first introduced back in late 2018 at the conclusion of the 115th Congress. However, no was vote was held for that session in the House. It was again reintroducing minor changes the next year. No alterations have been made from the previous version for this session of Congress.
Securities laws are positioned to minimize information asymmetry. However, The main argument behind the Token Taxonomy Act is that there is very little risk of information asymmetry between investors and promoters with respect to tokens in decentralized networks due to the lack of a central authority.