US Senators Propose Comprehensive Crypto Bill for Regulation

The Responsible Financial Innovation Act, introduced by US Senators Cynthia Lummis and Kirsten Gillibrand, aims to establish a comprehensive crypto bill for digital assets. After being tabled in the previous session of Congress, the bipartisan legislation will be reintroduced to the Senate on July 12. It clarifies the roles of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission in regulating digital assets and ensures consumer protection.

Originally introduced in June 2022, the Lummis-Gillibrand bill addresses the aftermath of the crypto market crash, which led to bankruptcies and token price drops. The updated legislation includes updates to the US tax code, enabling the industry to self-fund oversight and implementing guardrails to prevent future FTX-style events. The collapse of Terraform Labs, a South Korea-based firm, influenced the bill’s requirements for payment stablecoins to be issued solely by depository institutions.

While some criticize the lack of regulatory clarity, the Lummis-Gillibrand bill has received bipartisan praise for its action in the crypto space. The proposed legislation offers an alternative to other cryptocurrency frameworks, including a discussion draft in the House that limits the SEC’s authority and a proposal from the House Financial Services Committee for the Federal Reserve to regulate stablecoins.

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