As smart as human beings have proven themselves to be, we still suffer from our fair share of limitations. These limitations have popped up on the surface time and time again throughout our history, with each appearance instigating a lengthy string of detrimental consequences. Now, when you are up against such a risky dynamic, you naturally need some sort of a defensive coverage at your disposal. To the world’s credit, we’ll find that coverage once we bring dedicated regulatory bodies into the fold. The move was a big hit, considering it instantly made us feel safer than ever before. However, this utopia didn’t last for very long, and if we are being honest, it was all technology’s fault. You see, technology and its layered nature orchestrated a reality where certain people found themselves with an unprecedented shot at fulfilling their ulterior motives. Unfortunately, they made the most of it, therefore nullifying the entire progress that we made under regulatory stewardship, but the governing forces won’t take it lying down as well. After much wait, they are now actively looking to go on the offense, and one recently-introduced bill should help them big time in doing so.
Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) have formally proposed a new bipartisan bill, which is predicated upon conceiving a “complete regulatory framework” for cryptocurrency and all other digital assets. Named as Responsible Financial Innovation Act, the bill will deliver the goods by classifying digital assets into categories like commodities and securities, hence making it easier for the regulators to govern them moving forward. Notably enough, the legislation kind of takes away something from SEC to make cryptocurrency a jurisdiction of CFTC (The Commodity Futures Trading Commission). This, in particular, was a big call, as the lack of a defined power structure has been a major reason behind regulatory industry’s struggle against cryptocurrency. Beyond these measures, RIFA also introduces a new structure for stablecoins. The idea here is to minimize the risk associated with them, while also ensuring more seamlessness within their movement across the board.
“Digital assets, blockchain technology and cryptocurrencies have experienced tremendous growth in the past few years and offer substantial potential benefits if harnessed correctly,” said Senator Kirsten Gillibrand. “It is critical that the United States play a leading role in developing policy to regulate new financial products, while also encouraging innovation and protecting consumers.”
Moving on from clear definitions, authority structures, and a new stablecoin framework, Responsible Financial Innovation Act even plans on making meaningful changes to the way you handle crypto-related taxes and disclosures. For instance, it will enable you in terms of buying products using cryptocurrency without having to report your income. As for the disclosures, the bill make it mandatory to inform investors about issuers’ experience in developing digital assets, the price history of issuer’s prior assets, anticipated costs, and descriptions of the management teams, and liabilities of each issuer.