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Responsible financial innovation is long overdue. Act, which aims to create a regulatory framework for digital assets, was presented to the U.S. Senate on Tuesday. The official text of the 69-page document was also released.
The bipartisan bill, sponsored by Senators Cynthia Lummis of Wyoming and Kirsten Gillibrand of New York, “addresses CFTC and SEC jurisdiction, stablecoin regulation, banking, tax treatment of digital assets, and interagency coordination,” according to a statement. The statement continues, "Recognizing that most digital assets are much more like commodities than securities, the bill gives the CFTC clear authority over the applicable digital cash asset markets."
Senators appeared on CNBC on Tuesday morning, and much of the interview focused on the distribution of responsibilities between the SEC and the CFTC.
We are simply trying to match the digital asset world to our current regulatory environment. [...] We've spent a lot of time defining the modern Howey test," added Lummis. She said that she was meeting with second chair Gary Gensler that day, and Gillibrand had met with him the day before. She added:
“We’re going to continue to work with both the CFTC and the SEC to make sure that we both have found the right mix of using the Howey test to sort out which of those agencies best can regulate. We think that because we're using the Howey test, it's going to be okay."
"It is our fundamental duty for Congress to write these laws and for regulators to implement them. They don't decide what they keep and what they don't," Gillibrand said in that interview.
Gensler was inflexible in stating that most cryptocurrencies are transferable securities subject to the authority of its agency.
Related: SEC chair uses crypto enforcement in justification for FY2023 budget
The CFTC, it's a lot smaller than the sec, will be permitted to levy fees from entities operating in cash or cash digital assets to fund its additional regulatory responsibilities.
The bill addresses a range of issues relating to crypto. Commissioning an environmental impact study on digital assets, establishing an innovation advisory committee, and directing the development of cybersecurity guidelines. It also creates a tax framework and imposes an analysis of the use of digital assets in retirement savings.
'Building a regulatory framework for a new industry takes a long time,' said Gillibrand. The bill must now pass through the Senate's Banking, Agriculture, Intelligence and Financial Services Committees.
Blockchain association ceo kristin smith stated in a statement on the association's website, "the bi-partisan legislation announced today by senators lummis and gillibrand represents an important moment for crypto policy and a great step forward for the crypto industry in washington."
