By George Ward
Recognizing the pressing need for more action following the swift evolution and widespread embrace of digital assets, Senator Cynthia Lummis states that she is pushing for the fast implementation of a crypto regulatory framework. The lawmaker noted that the widespread adoption of virtual currency has added to the urgency of her move to ensure comprehensive regulation for the nascent industry across the US.
Commitment To Regulatory Adoption
After making her remarks, crypto Twitter commended the US Congresswoman for her initiative to push for a positive crypto regulatory framework. The community believes her actions will help facilitate digital asset ownership and transactions in the United States.
Moreover, her recent tweet reminded the community of the bipartisan crypto bill that was supposed to have been released in April this year. Senator Lummis, alongside her counterpart Senator Kirsten Gillibrand, has been actively collaborating to push forward the implementation of a bill for the comprehensive regulation of crypto assets.
The much-anticipated legislative initiative is poised to make substantial progress within Congress before the year ends, laying the vital groundwork for the ever-changing digital asset landscape. Senator Lummis also tweeted about her party’s win in thwarting the inclusion of a burdensome 30% tax on digital asset mining in the recently negotiated debt ceiling deal.
Highlighting the challenges during the negotiations, Lummis clarified that the quest to establish a transparent and effective regulatory framework for the crypto industry is still ongoing.
What To Expect
With several crypto regulatory issues to address, the proposed bill sets out to accomplish various vital objectives. Such objectives include providing a definitive and unambiguous definition for crypto and reassessing their categorization as “securities.”
The bill also seeks a precise classification system for tokens. This proposed legislation strives to establish a robust and dependable framework that instills confidence among businesses, investors, and other players within the crypto industry.
In addition, the proposed bill also seeks to resolve the existing regulatory ambiguities, fostering an environment that nurtures innovation and encourages responsible expansion within the sector. Meanwhile, Senator Gillibrand emphasized the importance of a meticulous approach to regulating this nascent industry.
Hence, he called for a thorough breakdown and clarifications before Congress passed the bill. Besides classifying or reclassifying tokens, the revised bill will offer explicit guidelines for purchasing tokens.
According to sources familiar with the matter, the proposed legislation aims to implement a blanket ban on algorithmic stablecoins. Nevertheless, Congress will make additional discussions and careful considerations to ascertain the designated entities authorized to issue stablecoins.
Meanwhile, industry experts opine that there should be specific requirements for maintaining US dollar reserves for such assets. Since the TerraUSD ecosystem collapse, algorithmic stablecoins have been under intense regulatory scrutiny, with some jurisdictions prohibiting their use outrightly.
After the Terra UST stablecoin lost its dollar peg in May 2022, regulators warned the public about algorithmic stablecoins’ financial risks to the economy. Following the collapse of the Terra network, it was no surprise that the House Financial Services Committee of the US Congress proposed a two-year ban on algorithmic stablecoins in September 2022.
Furthermore, the draft stablecoin bill requires the Federal Reserve and other state regulators to carefully examine any stablecoin issued by non-banking entities before they approve them.