Democrat Senator Kirsten Gillibrand and Republican Senator Cynthia Lummis have introduced a massive bill to address digital assets.
The bill, The Responsible Financial Innovation Act, “will create a complete regulatory framework for digital assets that encourages responsible financial innovation, flexibility, transparency and robust consumer protections while integrating digital assets into existing law,” according to a press release from the lawmakers.
Today, I’m introducing the Responsible Financial Innovation Act alongside @SenGillibrand. The United States is the global financial leader, and it’s absolutely critical the U.S. plays a leading role in this new frontier. https://t.co/PziuTwn8Wd
— Senator Cynthia Lummis (@SenLummis) June 7, 2022
“The United States is the global financial leader, and to ensure the next generation of Americans enjoys greater opportunity, it is critical to integrate digital assets into existing law and to harness the efficiency and transparency of this asset class while addressing risk. My home state of Wyoming has gone to great lengths to lead the nation in digital asset regulation, and I want to bring that success to the federal level. As this industry continues to grow, it is critical that Congress carefully crafts legislation that promotes innovation while protecting the consumer against bad actors,” said Sen. Lummis.
The legislation would integrate digital assets into “existing tax and banking laws.”
Sen. Lummis continued, “The Responsible Financial Innovation Act, a bipartisan framework that I crafted in conjunction with Senator Kirsten Gillibrand, creates regulatory clarity for agencies charged with supervising digital asset markets, provides a strong, tailored regulatory framework for stablecoins, and integrates digital assets into our existing tax and banking laws. I am grateful for Senator Gillibrand’s partnership on this legislation, and I look forward to bringing more of our colleagues into this effort.”
The bipartisan duo announced in March that they were beginning to work on the package.
“Digital assets, blockchain technology and cryptocurrencies have experienced tremendous growth in the past few years and offer substantial potential benefits if harnessed correctly. It is critical that the United States play a leading role in developing policy to regulate new financial products, while also encouraging innovation and protecting consumers,” said Sen.Gillibrand.
“The bipartisan Responsible Financial Innovation Act is a landmark bill that will establish a regulatory framework that spurs innovation, develops clear standards, defines appropriate jurisdictional boundaries and protects consumers. Importantly, the Lummis-Gillibrand framework will provide clarity to both industry and regulators, while also maintaining the flexibility to account for the ongoing evolution of the digital assets market. I am proud to introduce this bipartisan bill with Senator Cynthia Lummis, who has been a passionate and engaged partner, and look forward to working alongside her to build support,” Sen. Gillibrand added.
According to the senators, the bill makes a distinction between digital assets that are securities and commodities by “looking at the purpose of the asset and the rights or powers it conveys the consumer, giving digital asset companies the ability to determine what their regulatory obligations will be and giving regulators the clarity they need to enforce existing securities and commodities trading laws.”
It also creates a “workable structure for the taxation of digital assets.”
“As digital assets grow in use and legitimacy, it’s important to make it easier for people to use them in their everyday lives. The bill creates a de minimis exemption so that people can make purchases with virtual currency without having to account for and report income. The bill also clarifies the tax treatments of different actors and actions in the digital asset industry, including that miners and other validators are not ‘brokers’ for income tax purposes and that their rewards shall not be income until redeemed for cash,” the press release continued.
The full text of the legislation can be viewed here.