Everything You Need To Know About The Gillibrand Lummis Digital Asset Bill

Officially titled the Lummis-Gillibrand Responsible Financial Innovation Act (the "Bill"), Sens. Kirsten Gillibrand (D) and Cynthia Lummis (R) introduced the first legislation to touch on the digital currency world in an attempt to classify digital assets as commodities.

Gillibrand and Lummis state the bill is “landmark bipartisan legislation that will create a complete regulatory framework for digital assets that encourages responsible financial innovation, flexibility, transparency and robust consumer protections while integrating digital assets into existing law.”

So, what does the Bill propose? Here's the fast facts:

  • Gives the Commodity Futures Trading Commission (“CFTC”) regulatory authority.
  • Treats digital assets as “ancillary” unless they behave “like a security a corporation would issue to investors to build capital.”
  • Defines and creates disclosure requirements for payment stablecoin issuers in an attempt to guarantee that a payment stablecoin holder can always redeem the stablecoin in exchange for the equivalent dollar value.
  • Sets forth an optional framework that banks and credit unions can adopt when issuing stablecoins.
  • Creates an advisory committee composed of stakeholders, advocacy groups, federal and state regulators, and “experts” will be held responsible for responding to rapid industry developments and make recommendations based on new and emerging technology.
  • Imposes disclosure requirements on digital asset service providers to ensure that consumers understand what they are purchasing, the rights associated with those purchases, and the risks associated with digital currencies.
  • Requires the Federal Energy Regulatory Commission to analyze and report on energy consumption from virtual currency mining in an effort to move closer to deploying more renewable and clean energy and reducing energy waste.
  • Directs the CFTC and the SEC to 1) report on the development of a self-regulatory organization and develop a proposal for its creation; and 2) consult with the Treasury and National Institute of Standards and Technology to develop cyber security guidance for digital asset intermediaries.
  • Creates a de minimis exemption of $200 to allow consumers to purchase digital assets without having to account for and report income.
  • Excludes miners and other validators from being considered “brokers” for income tax purposes

The full Bill is available to read here. All information for this article was sourced from the official press release associated with the proposed Bill.

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