U.S. proposed a pro-crypto regulatory structure. It is unlikely that Senators Cynthia Lummis or Kirsten Gillibrand will see daylight this year.
Cynthia Lummis, a Wyoming senator, stated on July 19th that the U.S. Senate will not vote on the bill in this year’s session.
She told Bloomberg that it was a large topic, comprehensive and still new to many US senators.
She said that lawmakers may find it difficult to understand the vast scope of the legislation. The legislation, which was fully submitted on June 7, is designed to protect investors and not stifle innovation.
SEC vs. CFTC for Crypto Control
The legislation proposes that CFTC, the Commodities and Futures Trading Commission, becomes the official regulator for cryptocurrencies. They would be treated like commodities under this agency with more relaxed rules and regulations.
Gary Gensler (SEC Chairman) is opposed to the bill. He wants his agency control crypto because he considers most of it securities. This would require crypto companies to go through the same hurdles as regular banks and stock trading firms.
Gensler stated in June that the new legislation could harm the traditional financial industry. This industry is valued at over a hundred times as much as crypto.
Lummis-Gillibrand’s bipartisan bill also defines reserve requirements for stablecoin issuers and sanctions compliance. It also reports on energy consumption for proof-of work miners.
This is something Elizabeth Warren, an anti-crypto senator, has been advocating for since she believes crypto mining companies are destroying the planet. Warren, along with five other Senators, wrote last week to the Environmental Protection Agency and the Department of Energy (DOE) citing Bitcoin’s energy consumption and requesting that mining companies report it.
Lummis stated that the Senate Banking Committee could be able to approve the bill’s stablecoin provisions “in the coming months”, since they have been deemed a priority.
The United States is far from regulating digital assets, but bureaucracy moves very slowly.
Market rally continues
Despite regulatory uncertainty, crypto markets rallied this week. As Bitcoin and Ethereum reached multi-week highs, the total market cap has surpassed $1.1 trillion.
But macroeconomic storms are still in the air, with the Fed expected to raise rates and declare recession in the United States next week.
Marla Brooks – Financial Analysis
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