US Senators Propose Bill to Regulate Digital Assets

Daniel Attoe
Daniel Attoe

Updated · Jun 08, 2022

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The senators unveiled the long-awaited bill on Tuesday. It targets the creation of a regulatory framework for cryptocurrency.

A Landmark Legislation

Two US senators have released a proposed bill that seeks to introduce regulation for cryptocurrency and treat them as commodities. The legislation is called the Responsible Financial Innovation Act.

Bipartisan Senators Kirsten Gillibrand and Cynthia Lummis introduced the bill on Tuesday, months after they first teased it.

The Lummis-Gillibrand bill aims to create what would be the first comprehensive regulatory framework for cryptocurrency in the United States. If it passes into law, the legislation will settle looming questions hanging over digital assets amid high adoption and turbulence.

“The Responsible Financial Innovation Act creates regulatory clarity for agencies charged with supervising digital asset markets, provides a strong, tailored regulatory framework for stablecoins, and integrates digital assets into our existing tax and banking laws,” Senator Lummis said in a statement.

The bill is unlikely to become law in the current session of Congress.

What to Expect

Countering the Securities and Exchanges Commission’s position, the Lummis-Gillibrand bill asserts that “most digital assets are much more similar to commodities than securities.” It plans to hand over the regulation of a section of the industry to the Commodity Futures Trading Commission (CFTC).

That agency is already responsible for the futures trading of Bitcoin and Ethereum in the United States.

Furthermore, it will establish a framework for stablecoins, digital tokens pegged to commodities, fiat currency, or other cryptocurrencies. Stablecoin creators will have to hold equal measures of liquid assets to the value of their tokens in circulation.

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Daniel Attoe

Daniel Attoe

Daniel is an Economics grad who fell in love with tech. His love for books and reading pushed him into picking up the pen - and keyboard. Also a data analyst, he's taking that leap into data science and machine learning. When not writing or studying, chances are that you'll catch him watching football or face-deep in an epic fantasy novel.

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