Everyone’s abuzz over Libra and what it will mean for Facebook users. But here’s another point to consider: How will Congress legislate cryptocurrency now? Will the Token Taxonomy Act finally get passed?
Mike Minihan, partner and tax expert at BX3 Capital, a business advisory firm that helps companies get established with fundraising and professional services, has the following thoughts on Libra and the Token Taxonomy Act.
Why is regulation for cryptocurrency-backed securities so important for the US economy?
It may seem counterintuitive that regulation would be helpful for business but in the case of businesses that rely on a cryptocurrency component, the lack of regulation is harmful. The uncertainty that surrounds a business’s operations because of inadequate regulation (in a largely regulated economy) acts as a deterrent to those with good ideas who fear draconian measures when regulation inevitably comes.
How will the Token Taxonomy Act benefit the average American who might not understand cryptocurrency, much less have investment holdings in it?
The Token Taxonomy Act is a stepping stone for the architects of a new economy. It provides baseline guidance that will help builders and investors in this nascent technology. And it will ultimately benefit the average American when the underlying technology fulfills its promise to bring “better, faster, cheaper” to any number of transaction types.
How, if at all, will the Token Taxonomy Act bring to Libra, Facebook’s nascent cryptocurrency?
I think the more relevant question is what will Libra bring to the act. The sheer magnitude of Facebook means that Libra can’t be ignored. As a result, many members of Congress (thinking of you, Maxine Waters) had to get very smart, very quickly when it comes to cryptocurrency. Libra will shine a spotlight on the industry, and create a dramatically heightened interest in crypto, and consequently, the Token Taxonomy Act itself.
What should the general public know about the Token Taxonomy Act?
Congress is taking steps to ensure that America does not get left behind in the race to develop and implement new technology.
In addition, BX3 Capital just wrote about this issue here for Hacker Noon.