US Cryptocurrency Bill: What To Know About Digital Taxonomy Act, Blockchain Innovation Act

Two blockchain-related bills introduced by Rep. Darren Sotto, D-FL, were rolled into another bill called the Consumer Safety Technology Act, which sets out the rules, instructions and guidelines on how to use blockchain technology to combat fraud while at the same time ensuring that the United States remains a leader in the blockchain space.

The two acts -- the Digital Taxonomy Act and Blockchain Innovation Act -- filed by Rep. Sotto was incorporated into the Consumer Safety Technology Act which, according to news outlet Decrypt. It is concerned about protecting the public against digital asset-related scam and the fighting of fraud through the use of blockchain.

As a standalone bill, the Digital Taxonomy Act requires the Federal Trade Commission (FTC) to train and allocate resources to identify and guard against deceptive practices involving digital tokens. It also instructs the commission to produce a report to the House Committee on Energy and Commerce and the Senate Committee on Commerce, Science and Transportation discussing the efforts it took to combat digital assets-related fraud.

Citing that blockchain is important to American innovation, it instructs the FTC to provide recommendations so that the United States will remain competitive in the field.

The second bill called the Blockchain Innovation Act requires the Secretary of Commerce to produce, in collaboration with FTC and other departments, a report on how to use blockchain to fight fraud.

According to Rep. Sotto, blockchain has an incredible potential for innovation and economic growth.

“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,” he added.

Rep. Sotto has introduced or co-sponsored multiple blockchain-related or digital assets-related bills in the past.

In the Digital Commodity Exchange Act of 2020, digital commodity exchanges would be put in their own legal category with oversight from the Commodity Futures Trading Commission (CFTC).

In another co-sponsored bill called the Securities Clarities Act, any asset sold as the object of an investment contract would come under the definition of “investment contract asset.” The act would also provide regulatory clarity for launching an open blockchain network.