The cryptocurrency industry will be focused on Capitol Hill in the coming weeks after New York’s Democratic Senator Kirsten Gillibrand and Republican Senator Cynthia Lummis announced on Tuesday that they will unveil legislation in June that will establish a comprehensive “baseline” for the Cryptocurrency regulation in the United States.
Speaking alongside Lummis at the DC Blockchain Summit in Washington, DC, Gillibrand said the bill “will allow this industry to grow, thrive, continue to innovate and allow us to compete globally, with the most stable market, which is possible here in the United States”.
The legislation would codify both Bitcoin BTCUSD, +0.29% and Ether ETHUSD, -1.65% as commodities and Lummis said: “It is our intention that the [Commodity Futures Trading Commission] take the reins of jurisdiction over these two.”
Gillibrand said the legislation would give the CFTC oversight not only of the crypto futures markets but also of the cash market.
Under current law, the CFTC oversees the markets for commodities-based derivatives, but does not oversee the markets for those commodities themselves. Critics of the current regulatory framework argue that this offers little protection for investors who buy and sell cryptocurrencies from individuals or on exchanges.
The bill would retain the Howie test for other cryptos, a doctrine used by U.S. courts and regulators to determine whether or not a financial instrument should be considered a security and therefore falls under the jurisdiction of the Securities and Exchange Commission. It would also clarify that miners of bitcoin or other cryptos would not be considered broker-dealers and therefore would not be subject to stricter Internal Revenue Service reporting requirements.
“We’re trying to find the sweet spot to continue allowing innovation unhindered by regulations, but providing a regulatory framework that everyone can understand,” said Lummis. “Some of the innovation is actually slowed down due to a lack of regulation.”
As dozens of bills aimed at regulating one part or another of the crypto industry have been introduced in the House and Senate, Gillibrand said she is optimistic this legislation can garner broad bipartisan support and be signed into law by the end of this year early on.
“I’m very optimistic … because this bill has been thoroughly researched,” she said. “We have been talking to stakeholders for over a year. We have tried to integrate all the business models and asset classes that have been created so far.”
One challenge in passing sweeping crypto legislation is that multiple Senate committees can claim jurisdiction over the matter, but Gillibrand noted that her role on the Senate Agriculture Committee and Lummis’ seat on the Senate Banking Sector gives her influence on two of the most important bodies that would be necessary to approve the bill before the full chamber votes on it.
Lummis said she believes the SEC will soon approve a Bitcoin ETF, a move that could be accelerated if her new legislation creates more robust oversight of crypto spot markets.
“I met [SEC Chairman] Gary Gensler. We got this law started and he’s a very knowledgeable regulator,” Lummis said. “Behind closed doors I think it expresses a deep understanding. So I am actually confident that the current regulatory framework will be the right regulatory framework for the future.”
Comments are closed.