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The Digital Assets Bill: Lummis-Gillibrand Responsible Financial Innovation Act

Client memorandum | June 10, 2022

On Monday, June 6, 2022, U.S. Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) published a draft of their jointly sponsored Responsible Financial Innovation Act (“RFIA”), which would establish a comprehensive federal system of regulation for digital assets.  As a legal matter, the RFIA is notable for (i) providing a definition of “digital assets” and of various types of digital assets (e.g., virtual currencies, payment stablecoins, ancillary assets); (ii) defining the regulatory treatment of each of these types of digital assets (whether subject to banking, securities or commodities regulation); (iii) addressing other significant related regulatory schemes (tax, cybersecurity and AML); and (iv) providing a very workable path for the development of digital asset businesses and the distribution of digital assets. As a political matter, it is notable for the participation of Senator Gillibrand, a Democratic Senator effectively espousing a position — i.e., active support for the digital asset industry — that is very much in contrast to the positions taken by other Democratic Senators (particularly Senator Elizabeth Warren (D-MA) and Senator Sherrod Brown (D-PA)).  In the same vein, the bill is also notable for its rejection of the policy positions taken by Securities and Exchange Commission (“SEC”) Chair Gary Gensler (D) and its consistency with positions taken by SEC Commissioner Hester Peirce (R).

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