Senators Kirsten Gillibrand and Cynthia Lummis introduced the Responsible Financial Innovation Act on June 7, a historic bipartisan bill in front of the US Congress. The bill intends to provide clarity to regulators and the crypto sector in order to protect both investors’ and consumers’ rights.
This bill covers everything from taxes to stablecoin regulations after the recent TerraUSD collapse. It also includes a report on savings in digital assets. The bill also talks about the need for the creation of an advisory community consisting of both public and private sector members to issue recommendations for the changes happening in the crypto sector.
The main agendas of the bill are:
Public disclosures of stablecoin assets and 100% reserves on stablecoin issuers
Federal agencies track energy consumption and the creation of an advisory committee on crypto.
The bill will give the regulatory authority to the Commodity Future Trading Commission (CFTC) to regulate the crypto market. The senator’s main focus is on Bitcoin and Ether.
The bill also requires the Federal Energy Regulatory Commission to investigate and report on the energy usage done by the crypto industry. Crypto mining is a very energy-intensive endeavour. It’s important to look into this issue in order to figure out how the industry can achieve the climate goals by depending more on renewable and clean energy and reducing energy waste.
Senator Lummis started working on this crypto bill last October. The first draft of the bill started circulating in December, while Senator Gillbrand joined the making of the bill in March 2022.
Senator Lummis stated while introducing the bill:
“The Responsible Financial Innovation Act, a bipartisan framework that I crafted in conjunction with Senator Kirsten Gillibrand, creates regulatory clarity for agencies charged with supervising digital asset markets, provides a strong, tailored regulatory framework for stablecoins, and integrates digital assets into our existing tax and banking laws. I am grateful for Senator Gillibrand’s partnership on this legislation, and I look forward to bringing more of our colleagues into this effort.”
The industry’s reaction to the crypto bill is mixed. There are many who think that the bill is good for the crypto industry, but there are also negative responses. The crypto industry is pleased with the measure because it shifts regulatory responsibility from the SEC to the CFTC. Most people’s main concerns include financial reform and consumer protection, and they believe this policy is not fair enough to work for a long time. Financial analysts believe the law does not go far enough to control the cryptocurrency business.
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