BX3 Capital Talks the Token Taxonomy Act and Mobile Payments
Crypto lovers, take note: one bit of news recently arrived for us to consider as BX3 Capital sent word our way via its partner Mike Minihan about the Token Taxonomy Bill. You might not have heard of this legislation amidst all the clamor over the wall and the government shutdown, but this little slice of legislation may be poised to give the cryptocurrency side of mobile payments new life.
The Token Taxonomy Bill, Minihan notes, is the result of a lot of input from cryptocurrency industry thought leaders who went to Washington with one point in mind: prevent the establishment of ”regulation by enforcement,” the kind of legislation that would ultimately strangle innovation in the field and attach rules like so many lamprey to the underside of the cryptocurrency market’s belly.
Bipartisan in nature, the bill defines a “digital token.” In this case, it’s a result of “…a blockchain-based consensus process,” as opposed to a “…representation of a financial interest in a company, including an ownership or debt interest or revenue share.” This gives the Securities Act of 1933 a shot in the arm and brings it forward into a future that includes cryptocurrency.
The bill goes on from there, not only defining a cryptocurrency as not being a security, but also limiting penalty provisions involved in selling an unregistered security. The bill even specifically excludes the first $600 of gain from the sale of a cryptocurrency from taxation, giving users a tax-free path to buying and selling cryptocurrency in exchange for goods and services, making it closer to an actual currency than ever.
Sure, this bill isn’t perfect, but it’s also addressed a lot of formerly gray areas that might have left users scratching their heads and just staying out lest they run afoul of the feds. Al Capone, after all, famously got away with mass homicide, but lost to the IRS. What chance does the regular crypto investor have by comparison?
While this bill may not go through any time soon—depends on when Congress gets its collective act together vis-a-vis the shutdown and such—it could be just what the cryptocurrency market needs to establish a framework of legitimacy and ultimately start its path to full recognition.