U.S. Congressman says majority of tokens are ‘a currency or a commodity’
Congressman Tom Emmer recently outlined the approach of the Congressional Blockchain Caucus in an interview. It is essentially a group of Republicans and Democrats that aim to formulate policies around crypto, NFTs, DeFi, and gaming by understanding the implications of blockchain technology.
Last month, SEC chair Gensler had stated that the regulator needs more power to regulate the crypto market, something that Emmer expresses his disapproval on.
This time around, the SEC chair stated that a crypto ban is “up to Congress.” In response to the same, Emmer argued that Gensler “believes that almost all tokens are security,” adding that he “adamantly disagrees” to the same. He said,
“I think the community would disagree. Most of us would say, the vast majority of tokens out there are either a currency or a commodity.”
He explained that what Gensler is doing is “intentional” and not “ignorant,” in an attempt to “grow their regulatory jurisdiction over this industry.” Gensler has time and again said that certain tokens are securities. He had previously stated,
“It doesn’t matter whether it’s a stock token, a stable value token backed by securities…[they] must work within our securities regime.”
In the interview, Emmer raised objections to Gensler’s use of the word “stable value coins” for stablecoins. He argued that Gensler attempted to make them synonymous with ‘stable value funds’ which are under the jurisdiction of the SEC.
Additionally, it is noteworthy that stable value funds are a portfolio of fixed-income “securities.” In this context, Emmer speculated that the SEC is trying to gain control “over this incredibly fast-growing, very lucrative” industry,
“I think it’s a challenge to the central currency…I don’t think we should be emulating the Communist Party of China. “
This view is in contrast to that of former President of the Federal Reserve Bank of Boston, Eric Rosengren. He had recently said that he doesn’t see the US central bank’s digital currency as a stablecoin. But instead, as a retail payment or substitute for cash.
Commenting further on regulations, Emmer said that Gensler and the SEC are creating “regulation that doesn’t exist.” Meanwhile, he said that several bills are in the queue, but are stuck with the Financial Services Committee.
The bills he stated include The Securities Clarity Act to specify when a token can be considered a security by the SEC. Apart from that, another bill under Safe Harbor for Taxpayers with Forked Assets Act was introduced for taxation guidelines on “forked assets.”
Emmer said that the Blockchain Regulatory Certainty Act has also been reintroduced to simplify licensing under state and federal laws. Arguing against SEC’s financial stability stance, Emmer agreed that crypto will be a challenge to the existing banking system. But, he said,
“I think a free marketplace, when it’s truly free allows disruption in growth.”