Senators Cynthia Lummis and Kirsten Gillibrand proposed the Responsible Financial Innovation Act on 7 June. This is the first attempt to build a comprehensive regulatory framework regarding digital assets in the United States.
The bipartisan effort of Lummis and Gillibrand is regarded as a landmark bill as it attempts to integrate digital assets into the financial system. The Bill attempts to “Spur innovation, develop clear standards, define appropriate jurisdictional boundaries and protect consumers”, as per Sen. Gillibrand.
The legislation, “encourages responsible financial innovation, flexibility, transparency, and robust consumer protections while integrating digital assets into existing law,” as per the press release.
What’s the hype?
The bill comes after massive growth in the digital asset industry over recent years. However, there is increasing regulatory ambiguity in the sector because of a lack of appropriate legislation.
Furthermore, the bill created a clear standard for determining which digital assets are commodities and what types are securities. According to the press release,
“The Bill also authorizes a special depository institution charter under both state law and the National Bank Act for payment stablecoin issuance, with tailored capital requirements and holding company supervision.”
It also proposes the development of a Self-Regulatory Organisation (SRO) for maintaining strong supervision within the industry. Lummis added that the bill “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.”
How is the industry reacting?
Many experts in the crypto industry believe this is a welcoming addition to the ultimate goal of global adoption. Crypto policy expert Patrick Hansen tweeted that “First reactions seem mostly positive.” While he understands this will be a long legislative process, bipartisan support is crucial in the proceedings.
First reactions seem mostly positive.
Obv this is only the very first step/draft of a potentially longer legislative process, but bipartisan support seems like a promising starting point. https://t.co/oZG84b61P6
— Patrick Hansen (@paddi_hansen) June 7, 2022
On the other hand, the head of policy at Blockchain Association, Jack Chervinsky believed that there is still room for improvement in his Twitter feed. He also appreciated the bipartisan support and Lummis, and Gillibrand as “allies who want to get this right”. Chervinsky highlighted the inclusion of a modified version of the Digital Commodity Exchange Act (DCEA). The DCEA bill was proposed earlier this year that would make CFTC the primary spot market regulator for crypto.
There's a lot to like here. Some highlights & next steps:https://t.co/o0zHWUU52J
— Jake Chervinsky (@jchervinsky) June 7, 2022