Congress proposes ‘period of grace’ legislation for cryptocurrencies

Patrick McHenry suggests new token developments be given three years before being required to register under federal law

Congressman Patrick McHenry –  the Republican leader of the House Financial Services Committee – has proposed legislation to provide a ‘safe haven’ for digital token innovation.

The bill, made available by the House Financial Services Committee, contains a suggestion to provide a three-year period for developers to offer tokens without requiring registration. This would allow development teams to build a fully functioning network before officially registering the token.

This bill builds from the suggestion made by the United States Securities and Exchange Committee Commissioner (SEC) Hester Pierce, who recommended a similar three-year grace for token development.

At the time of Commissioner Pierce’s proposal, Catherine Coley, former CEO of Binance US said the idea was ground-breaking.

“If adopted, the proposed safe harbour could be the most ground-breaking development for the US cryptocurrency market to date [and] by putting development first and giving projects runway to build robust networks, the proposed safe harbour puts an important stake in the ground towards supporting American access and acceptance of digital asset markets,” she said.

“In the long run, it will help bring more Americans into digital asset trading and foster greater network participation.”

Speaking to Coin Rivet, Congressman McHenry said the current approach to regulation in the US threatened to hinder the progress of cryptocurrency and the technologies behind it.

“The US should be a global leader, not a global follower, when it comes to digital assets,” he said

“Unfortunately, our current regulatory framework threatens to push this technology – and the jobs created by this rapidly growing industry – overseas.

“[The Clarity for Digital Tokens Act] is a pivotal first step toward embracing innovation and technology here at home, rather than playing catch-up to our competitors.”

The bill comes after a year in which the SEC and its chief Gary Gensler have chosen not to provide any regulation on the cryptocurrency sector, leaving it off the regulatory agenda for a year.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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