The Responsible Financial Innovation Act (Lummis-Gillibrand)
Recent legislation introduced by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) in early June seeks to establish a comprehensive regulatory framework for digital assets in the United States.
Gillibrand is a member of the Senate Committee on Agriculture, Nutrition, and Forestry, the body that oversees the Commodity Futures Trading Commission (CFTC). Lummis is a member of the Senate Committee on Banking, Housing, and Urban Development, which oversees the Securities and Exchange Commission (SEC).
Key highlights from the legislation include:
- Clearly define which cryptocurrencies are commodities versus securities and would fall under either the CFTC or the SEC.
- Designate the CFTC as the primary regulator of the digital asset spot market and create a new registration category for digital asset exchanges; This could help pave the way towards a spot BTC ETF.
- Taxation of digital assets —this portion of the legislation encourages the use of cryptocurrencies as medium of exchange, and states that any transaction under $200 would be exempt from capital gains taxes. It also sets to define that income from mining digital assets is not taxable, until it is converted to fiat currency.
- Other provisions in the legislation include: introducing the concept of “ancillary asset”, consumer protections, energy, 401(k)’s, stablecoins
While the bill is unlikely to be signed into law before January 3, 2023, the Lummis-Gillibrand (RFIA) bill signifies a huge step forwards to establishing a clear regulatory framework for which market participants can participate in, fostering innovation, while protecting consumers and adhering to regulatory policy and guidelines.
At Coin Desk’s Consensus Festival this month in Austin, a panel with Senators Pat Toomey (R-PA), Lummis (R-WY), and Gillibrand (D-NY) suggested that legislation addressing stablecoins may become law before 2023.
About: Dr. Christopher Loo is a physician who became financially free at the age of 29, and retired early at the age of 38, as a result of making strategic investments after the 2008 financial crisis. A graduate of the MD-PhD program offered jointly through the Baylor College of Medicine and Department of Bioengineering at Rice University, he is the author of “How I Quit My Lucrative Career and Achieved Financial Freedom Using Real Estate”, and is the host of the Financial Freedom for Physicians Podcast. He is a regular contributor to KevinMD and has spoken about the importance of financial literacy for Passive Income MD, the White Coat Investor, Board Vitals, SEAK Non-Clinical Careers, SoMe Docs, Doximity, Medpage Today, FinCon, and other high-profile financial brands geared towards high-income professionals. He is passionate about the role that crypto, fintech, and innovation will play in enabling financial freedom, economic inclusion, access and opportunity for the entire world in the upcoming decades.