On September 29, 2020, Congressman Darren Soto’s bills, the Digital Taxonomy Act (H.R. 2154) and the Blockchain Innovation Act (H.R. 8153), passed out of the House incorporated into the Consumer Safety Technology Act (H.R. 8128).
For years, Americans have seen how emerging technologies, such as blockchain, improve the lives of so many while serving as enablers of social, economic and environmental growth. As blockchain moves to the center of the 21st-century, the United States must maximize its benefits to catalyze progress and opportunity for the American people. Both of Congressman Soto’s bipartisan bills seek to expand the potential of the blockchain ecosystem while leading the United States to a blockchain-enhanced government.
The Blockchain Innovation Act, incorporated into H.R. 8132, directs the Department of Commerce (DOC), in consultation with the Federal Trade Commission (FTC), to conduct a study and submit a report to Congress on the state of blockchain technology in commerce, including its use to reduce fraud and increase security. Ultimately, the goal of the legislation is to establish a Blockchain Center of Excellence within the Commerce Department. H.R. 2154 was s co-sponsored by Rep. Gutherie (KY-2) and Rep. Matsui (CA-6)
“Blockchain technology has an incredible amount of potential for innovation and economic growth,” said Congressman Soto. “I believe our government needs to support that growth, establish light-touch regulations to ensure certainty, protect innovation, stop fraud and enable its appropriate use for government, business and consumers. The study mandated by the Blockchain Innovation Act is a starting point meant to give government agencies a chance to make recommendations before any bills pass with a regulatory effect. These recommendations will perform an educational function to Members of Congress and will pave the way for more actionable blockchain-focused legislation.”
The Digital Taxonomy Act, incorporated into H.R. 8132 as amended, would also require the FTC to submit a report and recommendations to Congress on unfair and deceptive acts or practices relating to digital tokens. One aspect of the report asks the FTC to make legislative recommendations for how to further protect consumer and promotion and innovation in the global digital token sector. H.R. 8153 was co-sponsored by Warren Davidson (OH-8).
“As lawmakers, it’s our duty to ensure the United States continues to lead in blockchain technology,” said Congressman Soto. “The Digital Taxonomy Act adds greater jurisdictional clarity for a strong digital asset market in the United States. The amended version of the original bill highlights the importance of digital tokens and blockchain technology in driving innovation and consumer protection initiatives. The bill directs the Federal Trade Commission to produce a report that would detail how the FTC protects consumers from unfair and deceptive acts or practices and provide further recommendations. Hearing the opinion of regulators is an important first step to encouraging regulatory clarity with the aims of promoting innovation and maximizing the potential of virtual currencies for the U.S. economy.”
Congressman Soto was also an original co-sponsor of H.R. 8132, the American COMPETE Act, another bill that passed today that emphasizes emerging technology efforts, including blockchain.
Definition of digital tokens in the amended Digital Taxonomy Act of 2019 - A Bill to authorize additional appropriations to the Federal Trade Commission to prevent unfair or deceptive acts or practices relating to digital tokens and transactions relating to digital tokens, and to require a report to Congress on the Commission’s actions related to digital tokens.:
As used in this Act—
(1) the term digital token means a digital unit—
(A) that is programmed with rules that govern its creation, supply, ownership, use, and transfer, where such rules are designed to resist modification or tampering by any single person or persons under common control;
(B) that has a transaction history that—
(i) is recorded in a distributed, digital ledger or digital data structure in which consensus is achieved through a mathematically verifiable process; and
(ii) after consensus is reached, is designed to resist modification or tampering by any single person or persons under common control;
(C) that is capable of being transferred between persons in a decentralized fashion without an intermediate custodian; and
(D) that is not a representation of a financial interest in a company or partnership, including an ownership or debt interest or revenue share; and
(2) the term digital unit—
(A) means a representation of economic, proprietary, or access rights that is stored in a computer-readable format; and
(B) does not include a store of value.