On September 21, 2018, Congressman Tom Emmer (R-MN), co-chair of the Congressional Blockchain Caucus, announced his plans to introduce three pieces of legislation designed to support the use and development of blockchain technology in the United States. The first is a resolution proclaiming that it is the sense of the House of Representatives that “the United States should prioritize accelerating the development of blockchain technology,” the U.S. government should create “an environment enabling the private sector to lead on blockchain innovation,” and the government’s “aim should be to support and enforce a predictable light touch, consistent, and simple legal environment” for blockchain applications.
The second piece of legislation, named the Blockchain Regulatory Certainty Act, declares that blockchain developers and providers of blockchain services shall not be treated as money transmitters. Congressman Emmer intends for the Act to prevent virtual currency miners and providers of multi-signature wallets from being required to register as money transmitters.
The third piece of legislation, the Safe Harbor for Taxpayers with Forked Assets Act, would prevent the Internal Revenue Service from penalizing any taxpayer for underpayment or understatement of tax until the IRS issues guidance regarding:
- Rules for calculating and allocating the basis of forked convertible virtual currency;
- Rules for calculating the fair market value of forked convertible virtual currency at any given time; and
- Rules for determining the holding period of forked convertible virtual currency.
The proposed legislation addresses several pressing issues in the blockchain space. But the likelihood that the proposed legislation will become law soon is doubtful. The legislative process can be long, even for matters relatively familiar to members of Congress.
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About Blockchain Law Center
Blockchain technology utilizes a distributed digital ledger to record and track information, and can be leveraged to gain transparency and certainty in transactions ranging from cryptocurrency to supply chain tracking. This blog provides information on the legal developments surrounding implementation of blockchain technology, with an initial focus on the financial services sector.