The crypto industry has its fair share of detractors. It was once called a fad and was even called magic internet money. Regulators are also not on crypto’s side. Numerous enforcement actions have been brought upon legitimate digital asset businesses just trying to mainstream crypto. However, the crypto industry also has some allies in the government, and one of them is Senator Cynthia Lummis. In an interview, she discussed a proposal to regulate digital assets. The senator from Wyoming also criticized the SEC’s actions against Coinbase and even said that it is not the way to do business in the country.
The Securities and Exchange Commission (SEC) has recently filed a lawsuit against Coinbase, the largest crypto exchange in the US. The SEC is accusing Coinbase of operating as a securities exchange broker. According to Senator Lummis, Coinbase tried to ask the SEC for guidance on how to comply with regulations but was not given an adequate response. Instead, the crypto platform was slapped with an enforcement action.
Below is the video of Senator Lummis criticizing the SEC.
A Crypto Legal Framework is Being Formed
The Senator also mentioned the Lummis-Gillibrand Responsible Financial Innovation Bill. This bill was introduced in 2022 by Senators Cynthia Lummis and Kirsten Gillibrand. The bill aims to establish a regulatory regime for digital assets in the US. If passed, this will create a conducive atmosphere for the crypto industry to flourish.
Below are the salient points of the bill.
- It will create a standard to determine if a digital asset is a commodity or security.
- There will be clear definitions for digital assets.
- It will assign regulatory authority over digital asset spot markets to the Commodity Futures Trading Commission (CFTC).
- It will create requirements for stablecoins that will protect users.
- The bill proposes to create an advisory committee to advise lawmakers on fast-developing technology. It will be composed of stakeholders, regulators, and subject matter experts.
- Impose disclosure requirements on digital service providers, so consumers can make informed decisions.
- The bill also requires a study on the energy consumption of digital assets.
- The CFTC and the SEC will be directed to study and develop a proposal for the creation of a self-regulatory organization.
- It establishes a cooperative framework where fintech companies can work with federal and state regulators to test new products in the market on a limited scale.
- The bill will also create a workable tax framework for crypto.
- The bill will also direct the Government Accountability Office to study risks and opportunities with investing retirement savings in digital assets.
- Different government agencies will study the national security implications of the digital Yuan or China’s CBDC.
Lawmakers Recognize the Potential of Digital Assets
Several lawmakers and politicians are starting to realize that crypto is a tool that can be used for the common good. They also recognize that the government’s hostile approach to crypto is not the best way to encourage innovators and businesses to invest in the country. Other countries are taking advantage of the situation and are encouraging crypto companies to bring capital into their jurisdictions.
Hopefully, other lawmakers and the general public will support the initiatives of pro-crypto Senators like Lummis and Gillibrand; otherwise, the US might lose its edge as a leader in innovation. This new technology will continue to grow, and it is only a question if the US will take advantage of it.
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