The U.S. needs a more coordinated regulatory strategy around financial innovation, Sen. Cynthia Lummis (R-Wyo.) said.
The first-term, bitcoin-friendly federal lawmaker took the virtual stage Monday at CoinDesk’s Consensus 2021 in a pre-recorded interview with CoinShares Chief Strategy Officer Meltem Demirors to advocate for a more unified regulatory framework around digital assets that encourages innovation.
“The details of this are too important to get wrong, but it’s going to be a big lift for all of us,” Lummis said.
To that end, the senator’s Financial Innovation Caucus, which she founded with Senator Kyrsten Sinema (D-Ariz.), will formally launch tomorrow, she said. The caucus intends to study payments, settlement, consumer protection, digital currencies and other issues.
“We have to do a great deal more in the coming years to clarify and modernize these rules,” she said, adding:
“Now we need clear rules.”
Part of the U.S.’ efforts to bolster digital asset regulation must include its effort around a digital dollar, Lummis said.
The senator said a central bank digital currency or a stablecoin would be needed to help the country compete with China’s digital yuan.
“They’re thinking of rolling out additional uses for it at the 2022 Winter Olympics,” she said. “We want to make sure that we continue to be strong in innovation in the digital asset space.”
In response to a question from Demirors about what benefits Wyoming’s relatively new special purpose depository institution charter and other crypto-friendly regulations have brought to the state, Lummis said new crypto startups can take advantage of the business-friendly environment in the state.
“Our bank regulators have a regulatory manual that really provides a solid foundation, addressing consumer protection and safety, addressing the rules of the road for the charters that have been issued,” she said.
The Federal Reserve recently issued a proposal to allow certain chartered institutions access to its master accounts, which could include Wyoming-chartered SPDIs. If the proposal is finalized and implemented, it would bring the Wyoming institutions – which currently include Kraken and Avanti – one step closer to becoming full-service banks to the crypto sector.
Bitcoin mining is also aiding Wyoming by being used for stranded energy sources, Lummis claimed. In Wyoming, mining rig operators are hooking stranded natural gas up to bitcoin miners, redirecting fossil fuels that otherwise would have been vented into the atmosphere, she said.
“I’d like to point out that about 12% of energy comes from renewables. But in the case of mining for bitcoin, it’s about 40% renewables. So this industry is ahead of the game in terms of using renewable energy,” she said.