SNEAK PEEK
- Two United States Senators, Cynthia Lummis and Kirsten Gillibrand announced the release of the much-talked-about cryptocurrency bill.
- The new regulations contain a strategy for comprehensive guidelines for the crypto industry in the U.S.
- The bill will set new rules for stable coins too.
On Tuesday, a bipartisan pair of U.S. senators disclosed a bill to form new rules for cryptocurrency and hand the bulk of their supervision to the Commodity Futures Trading Commission (CFTC).
The bill was introduced by Republican Senator Cynthia Lummis, one of Congress’s most vocal cryptocurrency advocates, and Democratic Senator Kirsten Gillibrand and marks yet another ambitious effort by lawmakers to place clear guard rails around speedily rising controversial cryptocurrency markets.
Bitcoin and cryptocurrency investor Lark Davis shared the news on Twitter:
The biggest #bitcoin / #crypto bill ever to be proposed in the USA has been put forward by Senator Cynthia Lummis and Kirsten Gillibrand.
— Lark Davis (@TheCryptoLark) June 8, 2022
Here is what you need to know
According to the measure, not the Securities and Exchange Commission but the CFTC should be given the right to regulate crypto products. The smaller CFTC is considered a friendlier regulator for cryptocurrency. The Securities and Exchange Commission has typically found that crypto products must stick to several securities requirements.
Though the bill might not turn into law in the current session of Congress, its framework could serve as an initial point for future debates about how best to manage those markets.
Jaret Seiberg, an analyst with Cowen Washington Research Group, wrote that the bill could be the initial point for debate next year no matter which party controls the House or the Senate. Even if the details change, it’s important to appreciate the bipartisan effort to bring crypto into the existing regulatory regime.
According to the senators, the bill aims at providing certainty and clarity to crypto markets besides consumer protections.
The bill also seeks to establish new rules for stable coins, tokens intended to have their value pegged to a traditional asset like the U.S. dollar. Since the crash in the value of TerraUSD, these products have been under considerable pressure.
As per the new bill, stable coin issuers must maintain high-quality liquid assets equivalent to the value of all outstanding stable coins and public disclosures of those holdings.
