A bipartisan virtual currency resolution, House Resolution 835 (H.R. 835), was introduced by Rep. Adam Kinzinger and co-sponsored by Rep. Tony Cardenas on July 14, 2016. It represents one of the first federal legislative attempts in the U.S. to regulate this area of newly developing technology. The resolution’s preamble recognizes the emergence of virtual currency:

Whereas emerging payment options, including alternative non-fiat currencies, are leveraging technology to improve security through increased transparency and verifiable trust mechanisms to supplant decades-old payment technology deployed by traditional financial institutions …

It also recognizes that blockchain technology will impact a wide variety of industries:

Whereas blockchain technology with the appropriate protections has the potential to fundamentally change the manner in which trust and security are established in online transactions through various potential applications in sectors including financial services, payments, health care, energy, property management, and intellectual property management.

The resolution’s goals reflect the House’s view that any effective virtual currency/blockchain legislation must achieve a balance between innovation and consumer protection:

  1. the United States should develop a national policy to encourage the development of tools for consumers to learn and protect their assets in a way that maximizes the promise customized, connected devices hold to empower consumers, foster future economic growth, create new commerce and new markets;
  2. the United States should prioritize accelerating the development of alternative technologies that support transparency, security, and authentication in a way that recognizes their benefits, allows for future innovation, and responsibly protects consumers’ personal information;
  3. the United States should recognize that technology experts can play an important role in the future development of consumer-facing technology applications for manufacturing, automobiles, telecommunications, tourism, health care, energy, and general commerce;
  4. the United States should support further innovation, and economic growth, and ensure cybersecurity, and the protection of consumer privacy; and
  5. innovators in technology, manufacturing, automobiles, telecommunications, tourism, health care, and energy industries should commit to improving the quality of life for future generations by developing safe and consumer protective, new technology aimed at improving consumers’ access to commerce.

We are still a long way from the passage of comprehensive virtual currency/blockchain legislation. However, the bipartisan introduction of H.R. 835 at a time when the country is in the midst of a polarized presidential election, can signal legislators on both sides of the aisle to believe that federal regulation of virtual currency and blockchain technology is necessary to ensure that consumers obtain the full benefit of these innovations. Under the leadership of either Hillary Clinton or Donald Trump, each of whom has addressed virtual currency and blockchain technology during their respective presidential campaigns, Congress will hopefully move swiftly to pass legislation that accomplishes the goals set forth in H.R. 835. Contact your Congress member to encourage them to support this resolution.

Jeffrey Berns

Jeffrey K. Berns is the Managing Partner and head of the Los Angeles office for Berns Weiss Inc. Over the course of his 25-year legal career, he has tenaciously fought for the rights of consumers, concentrating his practice on consumer lending and consumer fraud class actions. Among his other accomplishments, he led a group of 20 law firms that prosecuted cutting-edge class action cases against financial institutions, such as Countrywide, Wells Fargo, and JPMorgan Chase, concerning destructive negative amortization loans that unknowingly caused borrowers to assume tens of thousands of dollars of additional debt. These efforts led to settlements comprising hundreds of millions of dollars in cash payments and substantial loan modification relief. Visit www.law111.com for more info. Read More
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