After months of teasing an updated version of their ambitious crypto legislation, Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) are set to reintroduce their Responsible Financial Innovation Act next Wednesday, as Congress continues to debate the future of digital asset regulation.
While legislative efforts progressed in both the House and Senate last year, any chance of passage stalled with November’s collapse of FTX, especially given founder Sam Bankman-Fried’s prominent presence in D.C. While different bills have surfaced during the current legislative session, Lummis and Gillibrand’s proposed act will be the most extensive, addressing key questions such as market structure, stablecoin oversight, and taxes.
“This legislation is the most comprehensive proposal to date that provides robust consumer protections and appropriately addresses the current landscape surrounding crypto assets,” Lummis told Fortune in a statement.
Stops and starts
Lummis and Gillibrand first introduced their bill in June 2022, a sweeping plan to deal with thorny questions plaguing the crypto industry, including how to tax transactions, how to regulate stablecoins, and how to delineate the jurisdictional oversight of the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Rather than a crypto bill parallel to the one introduced by Senators John Boozman (R-Ark.) and Debbie Stabenow (D-Mich.) in the Senate Agriculture Committee, Lummis and Gillibrand’s would span multiple committees and therefore introduce more complexities in deliberation, with Lummis sitting on the key Senate Banking Committee.
After 2022 ended with the crypto industry in flames and no successful legislation, Lummis and Gillibrand both signaled their intent to reintroduce their bill. At a March conference, they said they planned to circulate it in April, and later said they planned to make it public in June. One delay was a markup, or bill consideration session, held by the Senate Banking Committee on June 21—the committee’s first since 2019.
Another Senate crypto bill, a reintroduction of an anti–money-laundering effort cosponsored by crypto critics Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kans.), has been delayed as the two senators have reportedly struggled to recruit cosponsors.
Meanwhile, crypto regulation advocates in the Senate have been lapped by House counterparts, with the House Financial Services Committee and House Agriculture Committee hosting a number of hearings on digital assets and releasing their own market structure and stablecoin bills, led by Patrick McHenry (R-N.C.), chair of the House Financial Services Committee.
‘A very important factor’
Despite the Senate dragging its feet on introducing comprehensive crypto legislation, Ron Hammond, director of government relations at crypto trade group Blockchain Association, said that it will put Lummis “right in the forefront of these conversations.”
Even if the Republican-controlled House is able to vote on legislation, the main obstacle remains the Senate, especially the Senate Banking Committee, which includes vocal crypto critics such as chair Sherrod Brown (D-Ohio) and Warren, as well as its “history of not passing legislation,” according to Hammond.
That means that bills likely won’t be considered in their entirety for final passage but instead tacked onto larger legislative efforts, such as spending bills or the must-pass, once-every-five-years farm bill, which is being considered by the agriculture committees this year.
Reintroducing a crypto bill puts the two senators, and particularly Lummis, “to be the lead voice, as you can say, for these negotiations when they do occur,” said Hammond.
The updated bill, which will focus more on consumer protection and mandatory registration requirements for crypto projects, may still not move the needle among the Senate’s vocal crypto critics, although it will insert the notoriously slow-moving chamber back into the conversation.
“If there’s anything we’ve learned in crypto policy, whether you’re pro-crypto or anti-crypto, timing does seem to be a very important factor,” Hammond told Fortune.
