US Senators Kirsten Gillibrand and Cynthia Lummis are set to introduce a revised version of the Responsible Financial Innovation Act (RFIA) in mid-April. The bipartisan cryptocurrency bill was first announced in June 2022 and aimed to provide a comprehensive framework for regulating virtual currencies in the United States.
However, the bill did not pass. The revised bill will focus on setting new legal definitions for cryptocurrencies, clarifying the role of regulatory agencies, strengthening surveillance of stablecoins, and revising cryptocurrency taxation.
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have differing opinions on regulating virtual currencies. After the bill’s announcement, SEC Chairman Gary Gensler emphasized the need for the SEC to regulate the majority of cryptocurrencies, which he believed retain characteristics of securities.
In contrast, CFTC Chairman Rostin Behnam has emphasized the need for the CFTC to strengthen its regulatory authority over the spot market for virtual currencies, as it has overseen the futures market. Behnam has also supported defining virtual currencies as commodities, which is proposed in the RFIA.
Senator Gillibrand stated that the revised version of the bill includes more detailed definitions of tokens and addresses concerns about the bill. In a hearing before the Senate Agriculture Committee on March 8, Gillibrand explained that the SEC should regulate digital assets with characteristics of securities, while the CFTC should regulate assets that are commodities. The Office of the Comptroller of the Currency (OCC) should oversee stablecoins. Gillibrand also emphasized the importance of tax reform and cybersecurity requirements for the industry.
During the same Senate hearing, CFTC Chairman Behnam testified that the RFIA had successfully increased discussions about cryptocurrency and that the bill’s release had carefully considered all the elements that make up the market. Behnam supported the bill’s call to regulate stablecoins cautiously, stating that he believed stablecoins are commodities. In 2021, the CFTC fined Tether for approximately $42.5 million for the lack of backup assets for its USD-backed stablecoin, USDT.
Overall, the revised RFIA bill seeks to provide clarity and regulation for the cryptocurrency industry in the United States, and it will be interesting to see how it develops in the coming months.
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