Senators Lummis and Gillibrand have introduced a bipartisan crypto regulation bill to congress, called the ‘Lummis-Gillibrand Responsible Financial Innovation Act.’
This New 67-page bill covers everything from clarifying definitions to consumer protection, to implementing clear tax guidelines. The outstanding kicker in this bill according to a summary released on Tuesday is that it actually puts the Commodity Futures Trading Commission in charge of many digital assets instead of the Securities and Exchange Commission, a fundamental distinction because the CFTC is much less stringent with regulation than the SEC.
“[The bill] includes coins that are commodities, coins that are securities, it includes stablecoins, it includes a discussion about (central bank digital currencies),” Lummis recently stated at a Bitcoin-themed forum hosted by the Heritage Foundation. “It includes definitions, consumer protection, privacy, taxation, and several other components of the discussion as it relates to all of this, using the existing regulatory framework.”
Here are a few of the key pieces from the bill summary to note:
Exclusion of up to $200 dollars per transaction of a taxpayer’s gross income for use of virtual currency for payment.
Specifies that some DAOs, Decentralized Autonomous Organizations, are business entities for tax purposes and that they must be properly organized or incorporated under the law.
Digital assets gained through mining and staking rewards are not taxable until liquidated.
The definitions, “digital asset” and “digital asset exchange” will be officially added to the commodity exchange act.
CFTC is granted exclusive spot market jurisdiction over all fungible digital assets which are not securities.
In addition, digital asset exchanges will have a pathway to register with the CFTC to conduct trading activities and are registered as “financial institutions” under the bank secrecy act.
States that payment stablecoins are not listed as either a commodity or a security.
Providers of digital assets will be legally obligated to disclose certain information and agreements, as well as the source code for each digital asset.
A persons right to keep and control the digital assets they own will be codified.
Issuers of stablecoins will be required to have high-quality liquid asset reserves to back 100% of all coins they issue.
