Coinbase CEO Brian Armstrong says a replacement bill being considered by lawmakers in California would have a serious impact on digital assets and therefore the way forward for finance.
The legislation seeks to vary the meaning of securities under state law to exempt certain cryptocurrencies. Lawmakers and regulators within the US have struggled to clarify which digital currencies are securities within the context of the Howey Test, a federal metric wont to determine if a specific asset qualifies as an investment contract.
According to the proposal, assets whose profits don’t fully depend upon the management efforts of third parties won’t be considered as securities.
“This bill would create an exception from the above definition by providing that a digital asset meeting specified criteria is presumptively not an investment contract within the meaning of a “security.” The bill would allow that presumption to be rebutted upon good cause shown by clear and convincing evidence by the Commissioner of Business Oversight, as specified.”