The US crypto business is currently facing an identity crisis. Are cryptocurrencies commodities, like gold and pork bellies? Or securities, like stocks and futures? The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have conflicting views on this matter. Amidst this confusion, Senators Cynthia Lummis and Kirsten Gillibrand are set to unveil a new version of their proposed regulatory regime for the fintech industry, aiming to settle the question once and for all.
The Lummis-Gillibrand Responsible Financial Innovation Act
The centerpiece of the revamped Lummis-Gillibrand Responsible Financial Innovation Act is a measure that would classify most cryptocurrencies as commodities, putting them under the purview of the CFTC. This is a clear rebuke to the SEC, which, Lummis and others say, is stifling innovation in financial technologies. The legislation also seeks to prevent a repeat of the apparent failings in the crypto industry, which led to a series of high-profile collapses over the past two years.
Consultation with Regulatory Agencies
The SEC and other agencies were consulted on the content of the legislation. Despite this, Lummis worries that they may try to kill the measure. This highlights the importance of regulatory clarity for fostering innovation in the fintech industry.
Political Landscape and Future Steps
There is significant animosity towards SEC Chair Gary Gensler within the Republican-controlled House. Republicans have even introduced a bill meant to dilute Gensler’s power. However, lawmakers admit that they’ve created the space for the regulator to act—often unilaterally—on crypto because of inaction on the subject in Congress.
The proposed legislation and its potential impact on the crypto industry are significant. It’s crucial to follow the progress of the Lummis-Gillibrand Responsible Financial Innovation Act. For more in-depth discussions on crypto regulations, visit WhaleCoinTalk . For the latest news on related matters, check out the official US Government website.
For more information on crypto regulations check out:
Securities and Exchange Commission (SEC) on Cryptocurrency
Congressional Research Service report on Cryptocurrency
The Brookings Institution – Cryptocurrency regulation
Harvard Business Review – Cryptocurrency’s Role in the Future of Money
