Digital Assets Defined: How Lummis-Gillibrand Will Shape the Coming Fintech Debate
On June 7, 2022, U.S. Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) introduced the Responsible Financial Innovation Act (the "Bill"), which proposes a regulatory framework for digital assets across nine titles calling for "Responsible" activity in taxation, consumer protection, and securities, commodities, payments, and banking innovation. The proposed legislation is a comprehensive attempt to bring stability to a rapidly growing and often volatile industry.
If passed, it would affect the federal regulatory landscape in a way not seen since the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The Bill seeks to amend bedrock federal statutes, including, without limitation, the Securities Exchange Act of 1934 and the Commodity Exchange Act, in order to clarify regulatory roles for the Securities and Exchange Commission and the Commodity Futures Trading Commission, and solicits reports and rulemaking from those agencies and numerous others. Although it is unlikely that the Bill will be passed in its current form or in the current Congress, it is a first step to the development of bipartisan legislation on this important topic.
In this White Paper, we discuss the Bill's most significant implications, such as its attempt to resolve important questions concerning the legal status of digital assets, and allocation of regulatory authority.
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