Bipartisan Crypto Bill Hits Congress Today. Here's What We Know

It's unclear how the congressional bill would interact with the findings from Biden's executive order expected later this fall.

After several months of waiting, we will finally see today the bipartisan cryptocurrency bill proposed by U.S. Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), who joined forces in March 2022 to work on the legislation.

In a tweet to her nearly 87,000 Twitter followers, Sen. Lummis stated yesterday afternoon that she's anxious to get constructive feedback from the public on the policy. "As a former state treasurer, I am excited by the possibilities of incorporating digital assets into the American financial system. The legislation that @SenGillibrand and I are proposing will do just that." her tweet read.

What we expect to see in the crypto legislation

Portions of the legislation were leaked last month but staffers of both senators have said that significant revisions have taken place. That original public draft proposed oversight roles for the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) in particular, as cited in media report excerpts.

"Except as otherwise provided by this section, the shall have exclusive jurisdiction over any agreement, contract, or transaction involving a contract of sale of a digital asset that is offered, solicited, traded, executed, or otherwise dealt in interstate commerce."

Most of the federal agencies within the executive branch including the SEC and CFTC are currently evaluating various aspects of crypto and how they might regulate digital asset activities as part of President Biden's executive order earlier this year. The areas the regulators are exploring cover crypto taxation, stablecoins, cryptocurrency exchanges, as well as defining various digital assets.

For instance, the SEC has publicly stated that while neither Bitcoin nor Ethereum are securities that would require regulation like stocks or bonds, it's currently suing Ripple alleging that the XRP coin should be classified as a regulated security.

Defining digital assets is a critical step in deciding how agencies enforce policies and which regulators will be responsible for what. It's worth noting that the draft included a new, broad definition for digital assets called an "ancillary asset" -- "that is used to facilitate the governance of a distributed ledger technology network or decentralized autonomous organization."

We'll have to see if that language remains in the legislation that we'll all see later today, and whether it gets added to the Securities Exchange Act creating a new asset class for cryptocurrencies.

The only certainty we know right now is that there's no chance for the 70-plus page policy to get signed into law this year as congressional politicians are in reelection mode focusing on bigger issues such as inflation, gun control, gas prices, healthcare, and education.

In fact, according to a report from Pew Research Center earlier this year, the top three voter concerns are the economy, healthcare costs, and the COVID-19 pandemic. Interestingly, Pew ranked the top-18 most important issues to voters -- cryptocurrencies nor crypto regulation made the list.