The U.S. could soon see federal legislation regulating initial coin offerings if Republican Congressman Warren Davidson gets his way. The Congressman is an outspoken blockchain and Bitcoin fan, and he plans to introduce a bill that will create an asset class for cryptocurrencies.
By creating such an asset class, the government would be able to more effectively regulate cryptocurrencies and initial coin offerings, but more importantly, it would also stop regulators from classifying cryptocurrencie as securities.
The representative made the announcement regarding the bill at the Cleveland Blockchain Solutions conference, as Cleveland.com reported. The 4-day conference also featured Joseph Lubin, the co-founder of Ethereum.
— Gregory L. Watkins (@gwatkinsesq) December 3, 2018
The push for clarity in cryptocurrency regulations has largely come from Washington Republicans, who have long favored smaller government and less regulation. The biggest demands have been to the Securities and Exchange Commission as they continue pushing forward with plans to regulate Bitcoin and other digital currencies.
This past September, a group of 12 Republicans and 2 Democrats, which included Congressman Davidson, sent a letter to SEC chairman Jay Clayton, urging him to have the agency specifically detail how they plan on regulating the cryptocurrency industry.
Congressman Davidson is also a member of the House Financial Services Committee, which has oversight for the SEC, as well as the Federal Reserve and the US Treasury.
Crypto Regulation Needs a “Light Touch”
In August 2018, Rep. Davidson conducted an ICO regulation summit, with 32 cryptocurrency companies invited to Capitol Hill to weigh in on the direction ICO regulation should take.
As part of the summit which included both Washington Republicans and Democrats, Davidson was clear on the need to keep cryptocurrency laws and regulations less restrictive to avoid stifling innovation:
Tapping the potential ICO’s offer requires a law that provides a simple but clear ‘light-touch’ approach.
While regulations are still under development at the SEC, they recently indicated the possibility of going ahead with approval for Bitcoin ETFs, which would be a step in the right direction.
Crypto Evangelists Approve of Regulations
With U.S. and global regulatory agencies and central banks issuing warnings about fraud and price manipulation in crypto markets, it’s not surprising to see increased regulatory pressures.
In that light, there has been support from crypto evangelists like Mike Novogratz and the Winklevoss Twins.
All agree that regulation will add legitimacy to the cryptocurrency industry by ridding it of the “Wild West” moniker and weeding out scams and fraudulent activities.
“Weeding out the bad actors is a good thing, not a bad thing, for the health of the market,” Novogratz said.
Gemini cryptocurrency exchange CEO Tyler Winklevoss agrees, saying in an interview on Bloomberg TV:
These technologies can’t flourish and grow without thoughtful regulation that connects them to finance. As long as jurisdictions strike the right balance, we think it will be a huge boon and win for cryptocurrencies.
Washington Working on Cryptocurrency Adoption
While much of it remains behind the scenes, there are plenty of pro-crypto activities already in motion in Washington D.C.
Besides the letter to the SEC chairman in September 2018, Republican Congressman Tom Emmer introduced 3 separate bills, all aimed at supporting the development of blockchain technology and the cryptocurrencies that drive blockchain usage.
The 3 bills are:
- Resolution Supporting Digital Currencies and Blockchain Technology.
- Blockchain Regulatory Certainty Act.
- Safe Harbor for Taxpayers with Forked Assets Act.
Rep. Emmer is also a member of the House Financial Services Committee and the co-chairman of the Congressional Blockchain Caucus. He is also in favor of a regulatory structure that prioritizes development and allows for innovation to flourish:
This is an exciting time for blockchain technology and cryptocurrencies. Legislators should be embracing emerging technologies and providing a clear regulatory system that allows them to flourish in the United States.
Besides the Congressional Blockchain Caucus, a pro-crypto lobby recently launched in Washington. Leading the lobbying group is Coinbase, Circle, and the Digital Currency Group, which are 3 of the largest cryptocurrency entities in the U.S.
The recent developments in Washington show that there are a number of interests taking a clear pro-crypto stance and promoting increased cryptocurrency adoption.