Senators Cynthia Lummis and Kirsten Gillibrand are reintroducing their comprehensive legislation addressing regulatory gaps in the digital asset sector. Both Senators are members of the key Senate Banking Committee that will need to approve any legislation if it will move forward in Congress. A previous version of the legislation did not generate significant traction in the Senate.
Under the Lummis-Gillibrand Responsible Financial Innovation Act of 2023, the goal is to create a federal framework to ensure consumer protection while allowing innovation in digital assets.
The crypto asset industry is here to stay.
Today, @SenGillibrand and I are reintroducing landmark legislation to create a federal regulatory framework that allows crypto businesses and investors to prosper here in America while protecting consumers from bad actors. pic.twitter.com/z2pr0evWt2
— Senator Cynthia Lummis (@SenLummis) July 12, 2023
The comprehensive legislation will provide a regulatory structure for crypto exchanged which currently operate largely on piecemeal state regulations. Crypto exchanges will be required to register with the Commodity Futures Trading Commission (CFTC).
Stablecoins will be regulated as depository institutions similar to federal banking regulations.
A new interagency law enforcement group will be launched to help combat abuse and attempts at fraud.
It is notable that the legislation aims to empower the CFTC over the Securities and Exchange Commission, which is viewed as hostile towards innovation in financial services under the leadership of Chair Gary Gensler. The SEC has publicly stated that all digital assets are securities – minus Bitcoin – and thus should be regulated under securities law.