The US Government agencies such as the SEC and the CFTF have been creating laws and avenues of regulating Cryptocurrencies and Blockchain technology. Securities laws are prominent in this endeavor and that is about to be subject to a new law that is being filed in the state of Colorado titled as “Colorado Digital Token Act”.
The state lawmakers that brought forward the bill are Democrat Stephen Fenberg and Republican Jack Tate. Hence, it is very likely that the bill will get bipartisan support to make it into law if the majority of Colorado legislature members agree with the proposition in the bill.
The Thought Is That Cryptocurrencies Are Currencies And Not Assets
The thought behind the formation of the bill dwells on the general assumptions that Cryptocurrencies are designed to be used as currencies and not assets. Therefore, they fall outside the jurisdiction of the US CFTC and the US SEC. This is due to the fact that Digital Tokens such as Bitcoin, Ethereum, Bitcoin Cash, Ripple, etc. are not marketed for investment and speculative reason where the primary incentive is future interest earning. Adding to this thought, the bill also seeks to allay the notion that the primary motive for Cryptocurrencies purchase is centered on the Crypto market performance. Therefore, the bill will reaffirm the idea that Digital Tokens are currencies and not assets.
Doing Away With Regulatory Uncertainty
Regulatory uncertainty is one of the leading factors together with volatility, lack of public engagement, and many more reasons that inhibit the growth of the nascent industry. Further, according to CoinDesk, the vague government position on the matter has been hampering fundraising objectives of Blockchain startups: the adoption of the law will reinvigorate the use of Cryptocurrencies and facilitate the development of Crypto-using companies.
Creating A Crypto-Friendly State of Colorado
The proposed bill asserts that the state of Colorado with the Digital Token Act in force would be the go-to US state as far as Cryptocurrency use in industries is concerned. The local economy will be fueled by Cryptocurrencies a factor that is poised to make Colorado a leading hub for a crypto-based economy thriving on Web 3.0 applications and platforms. This would, in turn, make Colorado be the new Silicon Valley that operates on high-tech jobs with a pool of companies, competent and skilled human resources that are unmatched.
Redefining The Role Of Digital Tokens
From the bill, the purpose of acquiring Cryptos is being redefined as “something that offers or receives services, content or goods while offering access to services, content or goods.” Further, for the motive of purchasing Cryptocurrencies to be held, as put in place by the bill, there should be a consumptive reasoning purpose for the sale and transfer of a Token in order to complete a transaction. In fact, the bill is stating that “the initial buyer” has to acknowledge that the intent for purchasing a Crypto is for direct consumption and not for speculative purposes.
To eliminate misuse of the law that the bill is proposing, there is a provision to compel Crypto sellers to liaise with the Colorado securities commissioner in the statement.