US Senators Republican Cynthia Lummis from Wyoming and Democrat Kristen Gillibrand from New York, are working together for developing a broad-based crypto regulatory framework. At a Politico Live event on Thursday, the senators explained that the framework would help in figuring out how to regulate the crypto industry. According to Senator Gillibrand, their work they are doing is quite complex because involves reviewing the various aspects of the crypto industry intensively. She said that some parts of the crypto industry would be regulated by the Securities and Exchange Commission (SEC) and some would be regulated by the Commodities Futures and Trading Commission (CFTC).
She also added that some of the areas of the industry would require a broader look and they would set up a regulatory commission for looking at these issues and then provide guidance and make judgements. Gillibrand added that they were talking to regulators, stakeholders and industry experts to ensure that everyone is part of the legislative process. Senator Lummis was questioned if the CFTC would have a prominent role in the new crypto framework under development. She said that they would because in her opinion, bitcoin and ethereumare commodities. As crypto regulation would include a big role for the CFTC, Lummis said that working with Senator Gillibrand is a good thing.
The New York senator is on the Ag committee, which is an advantage because it means it has jurisdiction over it. She also noted that the SEC’s role would also be a big one where crypto regulation is concerned. However, Wyoming’s pro-Bitcoin senator did clarify that not all cryptocurrencies are classified as commodities, as more than 18,000 of them exist. She went on to say that they would continue using the 1940s’ Howey Test that would help them in distinguishing between a security and commodity. She further stated that central bank digital currencies (CBDCs) and stablecoinswould also be mentioned in the bill, but in a ‘smaller measure’.
As per Senator Gillibrand, she and Senator Lummis have a number of identical goals. She said that they wanted to address issues like soundness and safety. She asserted that they want to focus on consumer protection and work on certainty for markets. As for the timing of the bill’s introduction and whether it will be passed this year, Senator Gillbrand stated that she and Senator Lummis would continue working on it in the next couple of weeks. She also said that they wanted to listen to the stakeholders in order to identify some of the potential challenges associated with the regulatory framework.
The senator from New York noted that so far, the process had been helpful and fruitful and said that they could introduce the bill in the next several weeks. She also said that getting a vote on the bill may happen by the year’s end. Senator Lummis that they could present the bill in one piece, or it could also be broken down into five or six pieces for addressing various topics. This is because the legislation involves a variety of topics, including consumer protection, taxation, banking issues, definitions and privacy.