US Senator Cynthia Lummis and her counterpart Kirsten Gillibrand will introduce this week the latest bill seeking to regulate the cryptocurrency industry in the United States.
Cynthia Lummis, a US senator from Wyoming and one of the biggest advocates that Bitcoin has gained, has been working on a proposal that she says, will help the country to clear up regulatory uncertainty and provide clarity to the growing cryptocurrency industry and its participants.
Lummis' proposal, which has been supported by Democratic Senator Kirsten Gillibrand since March of this year, comes just months after the first executive order issued by the current president of the United States, Joe Biden, to focus on the regulation of cryptocurrencies in the country.
Other countries and organizations, such as the G7, are also making cryptocurrency regulation one of their central discussion points.
It may interest you: The President of the United States signs executive order to regulate cryptocurrencies
During an event at the American Enterprise Institute in Washington, Republican Senator Lummis, He spoke about what his bipartisan bill proposal for cryptocurrencies will be.
At the event, she said that both she and Senator Gillibrand have been studying the legal loopholes that exist to regulate crypto assets in current regulations and laws.
Also, during a interview Earlier this month, Senator Lummis outlined some of the possible solutions she is proposing in her proposal to Axios, in order to ensure financial stability, development and innovation without jeopardizing the security of investors.
Both senators, who will attend the DC Blockchain Summit conference this Tuesday, May 24, organized by the Chamber of Digital Commerce, say they are collaborating with other regulators, companies and industry enthusiasts to ensure that regulation does not undermine the impressive innovation of cryptocurrencies, whose market capitalization exceeds $1,34 trillion at the time of writing.
Lummis and Gillibrand will be in charge of the presentation «Crypto Consensus: Bringing Bipartisanship to Blockchain", where they will be presenting their proposed law for the regulation of digital assets in the United States.
Categorization and classification of cryptocurrencies
To properly regulate cryptocurrencies, it is necessary to “separate the wheat from the chaff,” Sen. Lummis said.
Therefore, his bipartisan bill will help provide an overview of how cryptocurrencies and other crypto assets work for facilitate their classification and supervision within the usual regulatory framework for traditional assets.
The regulatory proposal includes cryptocurrencies, stablecoins and CBDC, the digital currencies of central banks and which the US Federal Reserve is targeting to issue a possible digital dollar.
CFTC and SEC will be the supervisory bodies for cryptocurrencies
The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) will be the government agencies in charge of overseeing the cryptocurrency industry, Lummis said.
Classifying cryptocurrencies will help determine how these crypto assets fit into the same regulatory categories as traditional assets.
As a commodity, Lummis noted, Bitcoin will fall under CFTC oversight for trading purposes in the spot and futures markets. Cryptoassets, transactions and services that meet the Howey Test will be treated as a security, and will therefore fall under the jurisdiction of the SEC.
Lummis' bill will not regulate NFTs
On the other hand, although Lummis promises that her regulatory proposal will be a clear and complete guide to eliminate the uncertainty that exists in the country about cryptocurrencies and give way to the innovation and technological revolution that accompanies this industry, the non-fungible tokens (NFT), which have become an important sector of cryptoassets, will not be regulated under this law.
According to Lummis, It is difficult to classify NFTs, which can act as unique works of art or as utility tokens, so this class of digital asset does not fit into their proposition and requires additional regulation.
Environmental actions
Likewise, although several legislators have been pushing for a law that would allow them to suspend cryptocurrency mining in states like New York, in order to minimize the environmental impact of this activity, Lummis' regulatory proposal also fails to address the industry's environmental concerns.
Last month, in New York State, the State Assembly passed a bill imposing a 3-year moratorium on carbon and fossil fuel-based crypto mining. This bill is still awaiting the signature of New York Governor Kathy Hochul to go into effect.
More details are expected this week.
At the official presentation of the bill, Senator Cynthia Lummis and her counterpart, Kirsten Gillibrand, will provide more details on how their regulatory proposal will give a place to cryptocurrencies within US legislation.
Lummis' goal with this regulation is to continue to drive crypto innovation. Therefore, it is likely that if her proposal is approved, it will be taken as a spearhead that will help other states and countries legitimize cryptocurrencies.
States like Utah, California, Texas, Colorado, Virginia and North Dakota are already promoting favorable regulations for cryptocurrencies, helping to boost their use and adoption.
Continue reading: Utah approves the creation of a working group on Crypto and Blockchain
