Jul 26, 2023

Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) recently unveiled a new version of their bipartisan crypto bill, which could define more of the conversation around digital asset legislation.

Video transcript

The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. Good morning and welcome back to first mover, Senator Cynthia Lummis and Kirsten Gillibrand recently unveiled a new version of their bipartisan crypto bill which could define more of the conversation around digital asset legislation. Joining us now to discuss is Wyoming, Senator Cynthia Lummis. Welcome. Good morning Jen. It's nice to be with you. It's wonderful to have you on the show. Let's get right into the bill. It includes an updated consumer protection along with granting the CFTC clearer authority over crypto issuers. Tell us about bringing the bill back around. Why you feel it's important at this time? I think it's particularly important at this time. This is still a growing industry. Uh It's maturing, it's fleshing itself out. Uh Some of the bad actors are no longer uh on the scene. Uh We took the lessons learned from that and incorporated them into the latest version of Le Gillibrand to beef up the customer protections uh to make sure that there are sufficient assets backing uh these uh crypto assets uh to make sure that there's adequate disclosures. It is a more robust regulatory framework, but it still is very focused on innovation, which is what we want to pursue in the United States Senator. I'm going to ignore the fact that you said hello to Jen and not me. And I'll just pursue this question. You, uh, you, of course, this bill also, uh, I believe you're tackling stable coins as well here. Uh, dealing with federal and state regulators, uh, bank regulated banks. How does this differ from what's going through the House right now? Uh with uh uh Patrick mchenry's uh bill? Well, to my knowledge, the last version of Patrick mchenry's bill that I saw uh was a little broader uh in terms of treating algorithmic stable coins. Uh And uh lemme Gillibrand uh does not allow algorithmic stable coins, but I want you to know, I'm supportive of the House moving forward. I'm delighted that this is the week that they've chosen to uh advance their legislation. I think that that it will be followed in the House ag committee by legislation authorizing the CFD CS broad authority in the area of digital assets. So having these issues move uh in the House, I think is very important. Going without regulation is the problem. It's a problem for both the consumer and for um the industry because for example, if you go right now uh to the SEC and ask them, what do I need to comply with in order to uh participate in a Securities exchange commission, a regulatory framework. We're asked not to get an answer, but you could get slapped with a regulatory action and enforcement action that involves tremendous penalties. So even the industry knows that it needs rules of the road and that's what Laas Gillibrand provides that framework. Senator, what's the biggest pain point or the biggest challenge that you would want to get resolved right now when it comes to crypto legislation, there are so many things that have presented challenges for this industry. But what's the one that's at the top of your list? Well, the one that I'm working on literally this week uh is the illicit finance component among the things that we hear Jen in the Senate from skeptics about digital assets is that they're really only useful uh for uh sanctions avoidance or for criminal activity and terrorist financing, which of course is not true at all. But we have to get over that hurdle. One way to get over that hurdle is what we're doing with the National Defense Authorization Act, which is being debated on the floor of the Senate. This week, we've proposed an amendment that incorporates the illicit finance component of the Gillibrand bill into the NDA A because of its tie to illicit finance in the area of sanctions, avoidance and terrorism funding. If we can get that in the NDA A, it helps take that issue off the table because whether you're pro crypto anti crypto or crypto neutral. Nobody wants to see it used for illicit finance. So we want that discussion off the table and I think we might be able to get it off the table this week. Uh Both um Kirsten Gillibrand and I uh have worked with um uh Elizabeth Warren and Roger Marshall who have a bill on uh illicit finance related to digital assets. Uh And we took some of their ideas and folded them into this amendment. So, um they are both supportive of it. Uh And Senator Gillibrand and I are supportive of it. So you, so you see people that are covering the spectrum of views on digital assets overall uh supporting this uh illicit finance addition to the National Defense Authorization Act. Hi, you, you do work with Elizabeth Warren. Now, I, I've got to ask this about why, you know, let that, let, let your, let your opponents know this. Um But uh of course, uh you know, you're defining D I and how are you doing this? So exactly, um how, how, how are you able to define, define your bill? Uh What are you gonna going to do with it? And how are you able to regulate it when the whole point of it is that it's sort of decentralized, there's nobody, you can really uh you know, haul in for uh you know, for questioning or regulation. So that's a great question. Uh And of course, if someone, for example, is transacting with Bitcoin for everything they do and they do not interface with the United States dollar, then they're not going to be subject to the regulation in this bill. But if someone is interfacing in any way with the United States dollar, uh, then they're going to be subject to this regulation. And a lot of the regulations, uh, are already applicable to the US dollar. Things like, uh, the Anti Money Laundering Act, uh, the Bank Secrecy Act, um the um, know your customer provisions and other things that already apply uh to financial institutions that are dealing with US V I currency. So if you interact only with other digital assets and never interact with a government issued currency, you're not gonna have to deal with any of these regulations. But even if you're offshore and you form a, for example, um a, a custodian that's offshore, uh like Binance is going to have to interact uh with this US law if they intend to in any way, interface with the United States. Dollar Senator. Have you seen any indication that there's a genuine effort to launch a CBD C here in the US? Well, I hope not. Um I, I, and, and if there is, I hope it only deals with the behind the paywall, uh Federal Reserve relationships with banks and with other uh federal Reserve banks around the world. Uh I do not want to see a direct to consumer CD BC in the United States. That's what a stable coin is for a stable coin is for the purpose of interacting uh with the direct consumer CD BC needs to be behind uh the um the Fed's work with other uh Federal Reserve banks. Uh Otherwise CD BC in the United States could be used for the same type of surveillance uh that the digital yuan is being used for. Are you gonna subject yourself to the world coin or are you gonna stick your eye in that thing or? You know what I'm talking about? Are you guys doing that? Yeah, you're gonna do that. Would you do that? Not now. Uh It sounds a little premature to me. Apparently they take five different poses of your eye and uh I don't know. That's just a little too sci-fi and creepy for even for me. Are you gonna do it? I don't even like going to an optometrist.

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