A proposed bill was released to the public on Tuesday. It contains the most comprehensive legislation for crypto to date, and aims to regulate the market as a whole. The bill sponsored by Sen. Cynthis Lummis, and Kirsten Gillibrand, proposes to pass authority over most of the crypto sector, from the SEC to the CFTC.
The bipartisan bill, entitled the “Responsible Financial Innovation Act”, sets out to provide the much-needed regulation for crypto markets that all have been crying out for.
In a summary of the bill reported by Bloomberg, it says that in the near term, the bill has very little chance of being passed in the current Congress. However, it should start gaining ground after the mid-term elections in November, and into the new year.
One of the most significant provisions in the bill is the choice of regulator. Until now, the SEC (Securities and Exchanges Commission), with its chairman Gary Gensler, has been the main protagonist in attempting to regulate the crypto sector.
Be that as it may, he has generally been wildly unpopular across the whole of the crypto space, and is considered to lack flexibility, giving his agency an air of unapproachability. Also, Gensler has never been able to give the crypto sector the regulatory clarity it needs in order to be able to know if it is compliant.
The new bill proposes to pass the SEC authority on crypto over to the CFTC, which currently oversees commodities trading. In a summary of the bill it is shown that it:
“grants the CFTC exclusive spot market jurisdiction over all fungible digital assets which are not securities, including ancillary assets."
Also in the summary is a passage that argues the meaning of the Howey Test. It seeks to codify the test and to clarify once and for all if cryptos are securities or not. This could also be seen as a slap in the face for Gary Gensler, who has always maintained that nearly all crypto projects are securities.
Stablecoins are another area the bill highlights. It proposes that all stablecoin issuers be required to have a 100% backing, and that their stablecoins can be exchanged one to one with the U.S. dollar at any time.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.