Three pro-cryptocurrency bills are being introduced in Congress
The Congressional Blockchain Caucus is growing and its new co-chair is taking steps to make life easier for cryptocurrency developers and users
Update – 1/14/2019: The Blockchain Regulatory Certainty Act has been reintroduced by Reps. Emmer and Soto. We applaud this bipartisan approach.
Today Representative Emmer from Minnesota’s 6th congressional district and Representative Foster from Illinois’s 11th congressional district are joining the Blockchain Caucus as co-chairs. We are excited for the leadership and perspective that the new co-chairs will bring to the already dynamic caucus leadership.
Additionally, Rep. Emmer today announced that he would introduce two bills and a resolution to help rationalize the regulatory environment for cryptocurrencies. The resolution supports a light-touch approach to regulation, and the two bills create safe harbors, one for non-custodial use of cryptocurrencies and the other for taxpayers who report income from hard forks. Coin Center has been advocating for such legislation for some time and we congratulate Mr. Emmer and his co-sponsors on taking this approach.
The Blockchain Regulatory Certainty Act would create a safe harbor from state licensing requirements for non-custodial entities in the cryptocurrency space. Over the past three years we’ve made the case for a sensible and pro-innovation safe harbor of the sort Emmer’s now proposed.
State money transmission licensing laws are broadly drafted and carry harsh penalties for failure to comply. There is no reason for these laws to ever apply to persons who facilitate cryptocurrency use but who do not hold other people’s coins. Only custodians present a risk of loss that would be sensibly addressed through licensing.
But clarifying this particular interpretation of each state’s unique money transmission statute is a slow and inconsistent process, even with great model legislation from the ULC available. A federal safe harbor would instantly make the entire US a welcoming home for developers and technologists who are designing, building, and operating the fundamental infrastructure behind cryptocurrency and open blockchain networks.
The Safe Harbor for Taxpayers with Forked Assets Act would create a safe harbor from penalties for taxpayers who benefit from a cryptocurrency hard fork and make any good faith effort to comply with the presently uncertain tax policy surrounding these events. We’ve also been making the case for a tax safe harbor over the last year and fully support Rep. Emmer’s legislation. The bill is a reasonable way to insulate taxpayers from potential liabilities that are no fault of their own, stemming primarily from the present lack of clear guidance on forks from the IRS.
The Internet thrived as a global force for good and a largely American-led innovation, but that history was not inevitable. America became a welcoming home for technologists because of commonsense safe harbors passed by Congress in the 90s to protect web infrastructure builders (the CDA and the DMCA). Representative Emmer’s bills would be an important part of mainiting America’s position as the global home of innovation. The bills will ensure that developers and entrepreneurs continue to lead the way as open blockchain networks fulfill the still-outstanding promises (digital money, security, identity) of the internet revolution.