Lummis-Gillibrand Crypto Bill Likely to Remain on Backburner This Year

The pro-crypto regulatory framework proposed by U.S. Senators Cynthia Lummis and Kirsten Gillibrand is unlikely to see the light of day this year.

Wyoming Senator Cynthia Lummis said on July 19 that the U.S. Senate is unlikely to vote on the bill this year.

“It’s a big topic, it’s comprehensive, and it’s still new to many US senators,” she told Bloomberg in an interview.

The wide-ranging scope of the legislation may make it difficult for lawmakers to digest quickly, she added. The bill, which was submitted in full on June 7, aims to protect investors without stifling innovation.

CFTC vs. SEC For Crypto Control

The legislation proposes that the Commodities and Futures Trading Commission (CFTC) becomes the official regulator of cryptocurrencies. Under this agency, they would be treated as commodities with more lenient rules and regulations.

Opposing the bill is Securities and Exchange Commission (SEC) Chairman Gary Gensler, who wants his agency to control crypto as he considers most of them to be securities. This would mean that crypto companies must jump through the same hoops as those offering stock trading and regular banking.

In June, Gensler said the new legislation could undermine the traditional finance industry, valued at a hundred times more than crypto.

The Lummis-Gillibrand bipartisan bill also outlines reserve requirements for stablecoin issuers, sanction compliance, and energy consumption reporting for proof-of-work miners.

The latter is something anti-crypto Senator Elizabeth Warren has been pushing for as she thinks crypto mining companies are killing the planet. Last week, Warren and five other Senators wrote to the Environmental Protection Agency (EPA) and the Department of Energy (DOE), citing the Bitcoin network’s energy consumption and demanding that mining firms report their usage.

Lummis said that the stablecoin provisions in the bill could make their way to the Senate Banking Committee “in the next few months” since they are deemed a priority.

The wheels of bureaucracy turn very slowly in the United States, which is still no closer to regulating the digital asset industry.

Market Rally Continues

Regardless of the regulatory uncertainty, crypto markets have continued to rally this week. The total market cap has topped $1.1 trillion for the first time in five weeks as Bitcoin and Ethereum hit multi-week highs.

However, macroeconomic clouds are still looming with a Fed rate hike and the declaration of recession in the United States expected next week.