In an attempt to ease the regulations on the blockchain companies, three lawmakers of the US state of Colorado, on Friday, has introduced a bill called the Colorado Digital Token Act. The bill provides some exemptions to the cryptocurrencies from the existing “state securities laws.”
“The bill provides limited exemptions from the securities registration and securities broker-dealer and salesperson licensing requirements for persons dealing in digital tokens,” the filling for the bill noted.
Colorado is one of the harsh states towards cryptocurrencies, and the blockchain businesses operating in the state often face regulatory uncertainty as the laws for dealing with the sector are very unclear.
“What is different with having the programmatic approach is that it’s a narrow, nascent technology versus dealing with an established industry like alcohol. All the big players (from the alcohol industry) were there, and it was more like a showdown at Gucci Gulch,” said Sen. Jack Tate, one of the introducers of the bill.
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“Here, (blockchain) is a nascent technology dealing with a framework meant for other things. How do we update the regulatory framework now that we know there’s innovation out there? We don’t want to stifle innovation.”
According to the bill, “the costs and complexities of state securities registration can outweigh the benefits” for the cryptocurrencies businesses. In addition, the bill defines the consumptive purpose of the digital coins as the “means to provide or receive goods, services, or content, including access to goods, services, or content.”
Majority Not in Favor
Last year, a similar bill – Virtual Currency Exemption Money Transmitters Act – was introduced in Colorado which after a dramatic voting process was turned down.
For drafting this recent bill, Sen. Tate studied the local blockchain and finance companies for the last six months. He heard the take of the state legislators towards the crypto industry and even worked with politicians from both parties.
“I was really heartened by how much good faith everybody put into the process and how the regulators were willing to meet us and express their concerns but, at the same time, find solutions. A lot of times in my experience in private practice, you’re dealing with a government telling you, ‘No, you can’t do that.’ But this was ‘We want to support you,’” Eric Kintner, an attorney specializing in digital currency at Snell & Wilmer in Denver, told Colorado Sun.