Crypto investors, US Senator Cynthia Lummis has your back
U.S. Senator Cynthia Lummis — who’s seen as a crypto ally — has got your back. This week, two U.S. Senators, including Lummis, released a 69-page bill presenting crypto regulation to introduce a “complete regulatory framework for digital assets.”
Highlights from the crypto bill proposal
1/ Tax-free purchases of goods and services under $200 using crypto.
- Dealing with crypto taxes is a massive headache and this rule would make smaller purchases easier, expanding the crypto payments industry.
2/ Stablecoin must have 100% reserves and be redeemable by investors.
- This rule ensures that stablecoins are fully backed and that the stablecoin issuer would be able to fulfill their obligations should everyone want to convert their stablecoins to U.S.D.
3/ Categorize most cryptos as commodities — which gives crypto oversight to the Commodity Futures Trading Commission (CFTC) instead of the Securities and Exchange Commission (SEC).
- Giving CFTC oversight would be a win for the crypto industry (Axios) — as the SEC is known to have a tougher stance against crypto.
Better luck in 2024
Per Bloomberg, this is one of the most ambitious attempts to regulate the industry but the timing to pass any regulations is likely far away.
- Chances of passing are slim before November’s midterm elections — but act as starting point for negotiations.
- Cowen analyst Jaret Seiburg said it’s hard to see any crypto regulation bill passed by Congress until early 2024 (YF!).
Others have introduced similar legislation, which stalled in the White House. Lobbyists think the bill will be broken into smaller parts to make it easier to pass.
In 2021, the crypto industry spent $9M lobbying — influencing policies in Washington — which quadrupled since 2018. This number is still a fraction of the $70M spent by tech giants in 2021 and is only expected to increase.
Investors: Don’t be afraid of regulations
Regulations might sound scary, but they protect investors from fraud and outline how companies can operate.
- According to a new study by the Federal Trade Commission, crypto scams cost Americans over $1B last year.
- Regulations could help prevent these scams and stop another $50B+ project from going to zero in just over a week.
A 2022 report by Economist Impact identified regulations as the biggest barrier to institutional adoption. Shark Tank investor Kevin O’Leary believes that “institutional capital is like a giant dam, a wall of money, that can’t invest yet,” — saying regulators need to give a green light before this dam opens up.