US Senators Propose Reintroduction of Comprehensive Crypto Bill for Regulatory Framework

Senators Cynthia Lummis and Kirsten Gillibrand of the United States are set to reintroduce legislation aimed at establishing a comprehensive regulatory framework for digital assets. The bipartisan bill, called the Responsible Financial Innovation Act, is slated to be reintroduced to the Senate on July 12 after being tabled in the previous session of Congress.

The legislation seeks to clarify the roles of regulatory bodies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission in overseeing and regulating digital assets, with a focus on consumer protection. Originally introduced in June 2022, the bill comes in response to the crypto market crash and subsequent bankruptcies of prominent firms, as well as the decline in token prices.

According to information provided by Senator Lummis, the updated version of the bill will incorporate changes to the US tax code to enable the industry to fund its own oversight. It will also introduce safeguards to prevent events similar to the collapse of the crypto exchange FTX, which occurred after the initial introduction of the bill in November 2022.

The legislation is a response to incidents like the depegging of Terraform Labs’ algorithmic stablecoin from the US dollar. As a result, the bill will mandate that payment stablecoins be issued exclusively by depository institutions.

Critics have highlighted the need for clarity in US regulatory frameworks to enable firms to operate without fear of enforcement actions or other forms of crackdown. The bipartisan nature of the Lummis-Gillibrand bill has been praised, as it represents a cooperative effort amid attempts by some elected officials to politicize aspects of the crypto space.

While the Responsible Financial Innovation Act is one approach, there have been other proposed legislative initiatives in the House of Representatives that aim to address regulatory frameworks for cryptocurrencies. One draft proposal seeks to limit the SEC’s authority over crypto firms, while another suggests that the Federal Reserve should play a central role in establishing stablecoin requirements.

The reintroduction of the bill by Senators Lummis and Gillibrand underscores ongoing efforts to provide comprehensive regulatory guidance for the digital asset industry in the United States.

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