Wyoming, the state in the United States, has introduced legislation to create crypto regulations. The new law would grant Crypto DAOs legal approval and exclude digital tokens from being considered a form of securities, which could shape future legislation.
Warren Davidson Re-introduces “Token Taxonomy Act” for Crypto Regulations
After two failed attempts to introduce legislation to make cryptocurrency and digital assets exempt from US Securities regulations in 2018 and 2019, Representative Warren Davidson has re-introduced the bill.
It is being co-sponsored by Representatives Darren Soto, Josh Gottheimer, Ted Budd, and Perry Scott, which makes this a bipartisan effort.
The act aims to “amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude digital tokens from the definition of a security”, a topic that has become increasingly relevant after the complaint filed by the Securities and Exchange Commission (SEC) against Ripple Labs back in 2020.
If the act was to be approved, the SEC would have to make changes to how it taxes virtual currencies, how securities are defined, create a “de minimis” exemption for gains resulting from the sale or exchange of cryptocurrencies not involving cash.
Representative Davidson referred to the urgency of passing the act by stating:
“The window is closing. If we don’t act quickly, the United States will be left behind. Other countries have found ways to regulate blockchain projects and, in doing so, have made themselves more attractive to entrepreneurs.”
The act would not only facilitate how American companies participate in the cryptocurrency market or launch their own products but also benefits millions of potential investors by providing more clarity on the taxation of cryptocurrencies not involving dollar conversions.
Wyoming Is One Step Closer to Granting Legality to DAOs
The Wyoming state marked a milestone for DAOs back on Tuesday 9th when the senate’s committee approved Wyoming Senate Bill 38 which goes by the name “Decentralized autonomous organizations” and was originally introduced on January 12 of 2021.
The House’s Blockchain, Financial Technology, and Digital Innovation Technology Committee passed the bill to the state legislature, which will have to decide if it is signed into law.
If the outcome is positive, DAOs could be legally incorporated in the state by setting definitions and creating a regulatory framework that facilitates the incorporation of DAOs in the state, as well as cheaper.
While DAOs are not as prominent as they used to be many projects and crypto enthusiasts still advocate for them due to the benefits they provide.
The Need for Cryptocurrency Legislation
While other countries’ legislatures have already established a regulatory framework for cryptocurrencies and Decentralized Autonomous Organizations, the United States still hasn’t defined the set of rules which the industry must adhere to.
Regulation in the blockchain and cryptocurrency industry has historically been seen as a boogeyman that could destroy the principles of decentralization.
Blockchain technology was designed to counter but lack of legislation has prevented the industry as a whole from advancing, creating important setbacks for companies like Ripple in recent months.
Despite the lack of acknowledgment but crypto-anarchists and decentralization purists, the cryptocurrency ecosystem is already limited by governments and authorities around the world.
Not an Easy Market to Enter for Some
Many governments make access more difficult for newcomers who need to exchange fiat for cryptocurrency, as well as affecting how enterprises can interact with cryptocurrencies.
So far, regulation in countries like the United States has been unclear on various aspects which have prevented companies from venturing into the crypto space due to legal concerns in the future.
However, by creating a legal framework that companies and users can understand and use when joining the crypto space, mass adoption could be facilitated while the existing control of institutions over the fiat to crypto alternatives stays the same.
While certainly there are ways for legislation to harm accessibility to cryptocurrencies, cases like India’s plans to ban cryptocurrency have shown that companies and users would not agree with draconian measures as the world continues to transition toward digital decentralized currencies and solutions.