In the United States, Senators Kirsten Gillibrand and Cynthia Lummis, have introduced a bill whose objective is to clarify the legal environment surrounding crypto-assets. Many points are addressed, in order to position the country with regard to the different parts of our ecosystem.
A bill on digital assets in the US
This week in the United States, two female senators have teamed up to push for a cryptocurrency bill. They are Cynthia Lummis, a Republican senator from Wyoming, and Kirsten Gillibrand, who represents the state of New York for the Democratic Party
– Senator Cynthia Lummis (@SenLummis) June 10, 2022
This text aims to provide a clear regulatory framework around cryptocurrencies. Cynthia Lummis is aware of the opportunities brought by our ecosystem and intends to reconcile innovation and consumer protection:
“The United States is the world’s financial leader, and to ensure that the next generation of Americans enjoys greater opportunities, it is essential to integrate digital assets into existing legislation and harness the efficiency and transparency of this asset class while addressing the risks. “
So, one of the central focuses of this bill is to define the roles of different crypto-assets. This includes, for example, analysing to what extent they offer voting rights or represent securities. Various control points will then allow for the establishment of regulations tailored to the individual case.
Crypto-currencies such as Bitcoin (BTC) or Ethereum (ETH), which are similar in nature to commodities, would then be regulated by the Commodity Futures Trading Commission (CFTC).
It should be noted that the Wyoming senator has a reputation for being particularly open to crypto-currencies. Last February, she defended the idea that the US Federal Reserve (Fed) would have an interest in buying Bitcoin (BTC).
The regulatory sandbox
This bill is thus oriented around different themes and one of them is to make the US a regulatory sandbox. Senators Lummis and Gillibrand hope that federal and state regulators will be able to work with entrepreneurs in the blockchain ecosystem.
Priority should be given to innovation and allowing new products to be tested in a regulated manner. At the same time, the focus should be on consumer education.
An advisory committee should be set up to establish broad guidelines for the industry. This committee would bring together representatives of the various stakeholders, both from the legal side and from the crypto ecosystem.
On the other hand, the text asks the Government Accountability Office (GAO) to conduct an investigation into the integration of digital assets into retirement savings, such as 401 (k) plans. The objective here is not to restrict this possibility, but to map the risks, in order to ensure informed investment.
This notion of consumer education also applies more generally to platforms. The latter will be required to provide their customers with the best possible support in their approach to blockchain technologies.
The other areas addressed
Stablecoins are also important. The bill seeks to impose 100% collateralisation and reserve disclosure requirements on stablecoins. This should ensure that the possibility of redemption at the ratio of one to one is guaranteed.
At the same time, the text would facilitate the issuance of stablecoins for various financial institutions, provided they comply with the legal framework.
Tax breaks are also to be expected. We can mention staking and mining revenues, which will not be counted in the tax calculation until they have been sold.
Finally, the bill orders several investigations, linked to Chinese and Russian activities, to ensure that the US sets cyber security standards. This echoes the digital yuan, which is suspected of not respecting the privacy of its users.
There is still a long way to go before the texts come into force. Like any legal compromise, some points are beneficial and others more open to discussion, but they have the merit of guiding the country towards a precise position.
Beyond too strict regulations, legal uncertainties sometimes slow down innovation and can actually discourage companies from starting up.
