Lummis-Gillibrand Bill
Lummis-Gillibrand Bill, proposed in June 2022, is officially called the Bipartisan Responsible Financial Innovation Act, it is the first comprehensive regulatory proposition for the digital assets in the United States. It aims to provide regulatory clarity for agencies charged with supervising digital assets markets and a comprehensive framework for digital assets – integrating them into existing tax and banking laws. The legislations intends to spur innovation, develop clear standards, define appropriate jurisdictional boundaries and protect consumers. It defines which assets are commodities and securities by looking at the purpose and use of the asset. The bill also gives the CFTC authority where digital assets are more similar to commodities rather than securities. It also introduces rules on stablecoins – among others, guaranteeing that a stablecoin holder will always be able to redeem the equivalent stablecoin value in dollars, or introducing a framework for banks and credit unions to issue payment stablecoins. Other aspects of the Bill include disclosure requirements on digital asset service providers, a study on digital asset energy consumption, a study on the development of a self-regulatory organization and provides a regulatory sandbox for state and federal regulators to collaborate on innovative financial technologies, as well as creates a structure for the taxation of digital assets. Introduction of the bill would bring about necessary clarity and certainty in the area.
McHenry Bill
In November 2021, Patrick McHenry together with Congressman Tim Ryan and a group of lawmakers, introduced the Keep Innovation in America Act. The legislation aims to fix the digital asset reporting provision in existing law and provide legal clarity in order to encourage technological innovators and entrepreneurs. The changes will include an alteration to the section 80603 of the Infrastructure Investment and Jobs Act, which due to a limited understanding of the digital assets ecosystem, stifles innovation and raises concerns of privacy. The new proposal creates an alternative definition of ‘broker’ – capturing only those entities which should qualify under it and promises that a study be conducted on the expansion of the definition of ‘cash’ onto ‘digital assets’.