Long-Awaited U.S. Crypto Bill Is Here, What Does It Mean?

A highly anticipated bipartisan bill released Tuesday lays the groundwork for comprehensive crypto regulation in the United States.

The Responsible Financial Innovation Act, drafted by Senators Cynthia Lummis and Kirsten Gillibrand, represents a rare collaboration between Republicans and Democrats to regulate crypto at the federal level.

The bill plans to tax-exempt crypto transactions under $200, a move that could boost its use as a currency, according to a report by Forbes. It will establish a crypto advisory committee to help guide regulators.

It also brings crypto under the purview of the Commodity Futures Trading Commission (CFTC), rather than the Securities and Exchange Commission (SEC). Several crypto proponents have pushed for such a regulatory move given the uncertainty over the SEC’s stance on crypto as a security.

However, the bill is only a draft. It will now be subject to a series of reviews and votes before it is even eligible for passage.

Bill Includes Regulatory Response to Terra Crash

A month after the Terra crash, the bill introduces strict laws for stablecoin issuers. They must be registered in the United States and maintain a 100% reserve to back the token.

The move comes after several regulatory leaders, including Treasury Secretary Janet Yellen and SEC Chair Gary Gensler, called for more regulation to prevent another Terra crash.

The bill also follows an executive order from President Joe Biden earlier this year calling for a concerted approach to enact crypto regulation in the United States.

The bill was unveiled in March at a Politico event by Lummis and Gillibrand.

Restrictions on crypto anonymity?

But while the bill aims to recognize crypto in the US financial system, it appears to come at the cost of the anonymous nature of the space.

The bill plans to introduce strict registration and disclosure requirements for all crypto organizations, including digital autonomous organizations (DAOs).

DAOs must register as a corporation in the United States, while the identities of their founders must be public. The move is likely to significantly reduce anonymity in the crypto space.

With over five years of experience in global financial markets, Ambar plans to leverage this knowledge for the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments could affect crypto markets and what that could mean for your bitcoin holdings. When he’s not scouring the internet for the latest news, you can watch him play video games or watch Seinfeld reruns. You can reach him at [email protected]

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