The Largest Crypto Bill Has Finally Been Unveiled. Here Are the Key Points.
KEY POINTS
- Senators Cynthia Lummis and Kirsten Gillibrand have come together to release a bill that will clarify the trading of digital currency on a national level.
- This bill divides digital assets into two categories: decentralized commodities and equities.
- The bill is still on day one of its unveiling and must pass through four committees of jurisdiction.
Big news in the crypto world as a barrier toward growth is being addressed with the release of a regulatory bill.
Today is day one of the unveiling of the long-awaited crypto bill. If you follow cryptocurrency news, you know that one of the main barriers to the widespread embrace of cryptocurrency is the lack of regulations around it. If something is not defined and has no set of rules or standards surrounding it, it is nearly impossible for it to grow and reach nationally or internationally.
That's why two U.S. Senators from different parties came together on a bipartisan bill that will begin to classify and clarify the new world of digital currency. Senator Kirsten Gillibrand (D-NY) of New York and Senator Cynthia Lummis (R-WY) introduced this bill with the goal of fostering the innovation of this new currency while providing regulatory clarity.
Details of the bipartisan bill
The bill divides digital assets into two categories. It establishes Bitcoin and Ethereum as decentralized commodities that would be regulated by the CFTC. And in the other category, it declares other cryptocurrencies as equities to be regulated by the SEC. The goal is to create safety, transparency, accountability, and certainty. Regulation has been sought for the past few years as a necessary step toward the mainstream embrace of DeFi. The bill dubs digital currencies as "ancillary assets" defined as intangible, fungible assets to be sold in connection with a purchase and sale of a security. This makes them commodities and subject to the jurisdiction of the CFTC. These digital coins will not be treated like conventional securities under the surveillance of the SEC, however, unless the holder is entitled to corporate investor benefits such as dividends or other financial interest.
Where does the bill go from here?
As we have seen, building a regulatory framework for a new industry takes time. Although the launch of this bill today is a great step forward, the bill is still in process. It still requires approval from the four committees of jurisdiction: banking, agriculture, intelligence, and financial services. Each of these committees will play a part in regulating different pieces of the bill. Gillibrand said the bill would "provide clarity to both industry and regulators, while also maintaining the flexibility to account for the ongoing evolution of the digital assets market." Essentially, this legislation will provide rules and guidelines so that the world of cryptocurrency can continue to expand and grow.
Our Research Expert
Katie Clinebell is a freelance content creator and digital marketing strategist for FinTech, blockchain, and crypto brands. She has created award-winning campaigns for Snapple and Tai Pei Frozen Asian Food and received an Adobe Academic Achievement Award for content about Olympic athletes.
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