United States Senators Cynthia Lummis and Kirsten Gillibrand are set to reintroduce the Responsible Financial Innovation Act, a piece of legislation aimed at establishing a comprehensive regulatory framework for digital assets.
The bipartisan bill, which had been tabled in the previous session of Congress, will be reintroduced to the Senate on July 12.
The main objective of the Lummis-Gillibrand bill is to provide clarity on the roles of regulatory bodies such as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission in overseeing digital assets.
Additionally, the legislation aims to enhance consumer protection measures within the digital asset space.
Originally introduced in June 2022, during a period marked by a significant crypto market crash, the bill seeks to address the aftermath of the market downturn.
It includes updates to the U.S. tax code that would allow the industry to finance its own oversight and implement safeguards to prevent events like the collapse of FTX, a crypto exchange that occurred after the bill’s initial introduction in November 2022.
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The legislation was prompted by the collapse of Terraform Labs, a South Korea-based firm, which experienced the depegging of its algorithmic stablecoin from the U.S. dollar.
As a response, the bill will require payment stablecoins to be exclusively issued by depository institutions.
Critics of U.S. regulators have argued that there is a lack of clarity in the regulatory environment, which allows firms to operate without fear of enforcement actions.
The Lummis-Gillibrand bill has garnered praise for its bipartisan approach during a time when some elected officials have politicized certain aspects of the crypto space.
While the Responsible Financial Innovation Act represents one option, other legislators in the House of Representatives have proposed alternative legislation to address the regulatory framework for cryptocurrencies.
A discussion draft released in June suggests limiting the SEC’s authority over crypto firms, while the House Financial Services Committee has drafted legislation proposing that the Federal Reserve become the primary regulator responsible for establishing stablecoin requirements.
Overall, the reintroduction of the Responsible Financial Innovation Act reflects ongoing efforts by U.S. lawmakers to develop a comprehensive and balanced regulatory framework for digital assets, with the aim of protecting consumers and promoting innovation within the industry.
