U.S. Senators Cynthia Lummis and Kirsten Gillibrand unveiled the full version of a bipartisan bill to regulate the crypto industry, The Washington Post reports.
The measure, titled the Responsible Financial Innovation Act, creates a legal framework for digital assets and virtual currencies, and defines regulatory authorities.
The bill would require crypto service providers to disclose information to help consumers make informed decisions.
“The bill establishes a regulatory baseline that fosters innovation, develops clear standards, defines appropriate boundaries of jurisdiction, and protects consumers,” Gillibrand said.
Adam Cochran, a partner at venture firm Cinneamhain Ventures, noted that the measure would broadly bring clarity to the US crypto industry but would entail enormous costs and growing pains.
1/12
Wow, so first read some good stuff that moves us forward, but a lot of rough stuff.
Overall this gives US crypto clarity but it will have a huge cost and growing pains.
Here’s what I noticed in the first read. https://t.co/Cb1TM0DVJs
— Adam Cochran (adamscochran.eth) (@adamscochran) June 7, 2022
He pointed to several provisions, including:
- the need for legal registration of DAOs, exchanges, and stablecoin issuers;
- operators of “stablecoins” would in practice be treated under regulation like traditional financial institutions, with mandatory reserve backing and other burdens;
- stringent disclosure requirements;
- rigorous exchange oversight.
In his view, the former would pose significant challenges to DeFi projects but would hinder illicit activity in the sector. The other provisions would raise costs for crypto companies and exchanges, but would improve listing quality and consumer protections.
The expert noted as a positive that most cryptocurrencies would fall under the jurisdiction of CFTC as digital commodity assets.
The bill is unlikely to pass in its current form, if at all, Cochran stressed. If it does pass, long-term gains would go to large market players, but the near term would be painful for 99% of participants.
12/12
This looks like it was only a draft bill and may not be complete/final/even real.
I would say if it is though, and if it passed in this form its good *LONG* term for big entities, super painful near term for 99% of crypto.
— Adam Cochran (adamscochran.eth) (@adamscochran) June 7, 2022
In December announced this bill. In March, lawmakers released some of its details, including a division of oversight between the CFTC and the SEC.
In May, Lummis clarified that the provisions on non-fungible tokens were not included in the document due to difficulties with their classification.