On Tuesday, Wyoming Senator Cynthia Lummis and New York Senator Kirsten Gillibrand put forward a new bipartisan crypto bill called the Responsible Financial Innovation Act, which would reduce the Security and Exchange Commission’s regulation of at least 200 cryptocurrencies and no longer require American citizens to tell the IRS when they have crypto profits of $200 or less.
The bill is unlikely to pass, but does present the most comprehensive bill on cryptocurrencies up for consideration.
Instead of making the SEC a regulator of currencies, the bill would shift authority to the Commodity Futures Trading Commission, which would ensure that cryptocurrencies are treated as commodities instead of securities. The crypto industry would need to finance the CFTC to regulate the industry and take on myriad new responsibilities related to virtual assets.
Gillibrand sits on a Senate committee overseeing the CFTC, while Lummis watches over a Senate committee scrutinizing the Securities and Exchange Commission.
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The bill also provides explicit definitions for key terms like digital assets, virtual currency, payment stablecoins, and smart contracts.
Additionally, the law will also address stablecoins, which have recently come into the spotlight after the recent decimation of algorithmic stablecoin Terra’s value.
Under the new legislation, stablecoins would need to have a 100% reserve and be backed 1:1 by the U.S. dollar. The bill would also lay the groundwork for a future where banks and credit unions might be able to issue their own stablecoins without becoming depository institutions. "Existing stablecoin issuers and new entrants into the market have an adequate opportunity to compete with existing banks and credit unions,” the bill said.
The bill also touches upon the highly controversial issue of cryptocurrency’s environmental footprint, and tasks the Federal Energy Regulatory Commission with the responsibility of studying crypto’s energy costs. To that end, the studies would assess which energy sources crypto mining and staking are reliant on and the amount of energy being used for operations.