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Wyoming Senator Cynthia Lummis announced at the Blockchain Association Policy Summit in Washington, D.C., that she intends to move forward with the Responsible Financial Innovation Act next week, marking a critical moment for cryptocurrency regulation in the United States. The bill, which focuses on creating clear rules for digital assets and cryptocurrencies, has faced numerous challenges including frequent draft changes during bipartisan discussions.
The Senator acknowledged the exhaustion of her staff after months of negotiations, stating that it's better to proceed with the current product and allow everyone a break over the Christmas holiday. Lummis emphasized her commitment to sharing a draft by the end of this week, allowing industry stakeholders, Republicans, and Democrats to review it before the markup hearing.
Legislative Journey and Challenges
The discussion draft emerged in July 2024, following the House of Representatives' passage of the Digital Asset Market Clarity Act. However, progress stalled significantly due to the longest government shutdown in U.S. history, which lasted over a month, combined with substantial disagreements among lawmakers regarding decentralized finance (DeFi) regulations.
These delays have created growing concern within the crypto industry about the legislation's timeline. Lummis acknowledged these worries, noting that the frequent changes to the draft during bipartisan negotiations have contributed to uncertainty in the market. The Senator remains optimistic about finalizing the legislation, though she projects it may not become law until 2026.
Regulatory Power Shift
The proposed bill represents a fundamental shift in cryptocurrency oversight, potentially granting the Commodity Futures Trading Commission (CFTC) expanded authority over digital assets. This change would reduce the Securities and Exchange Commission's (SEC) current dominance in crypto regulation, marking a significant restructuring of regulatory responsibilities.
Industry leaders have expressed strong support for this regulatory realignment. Coinbase Chief Legal Officer Paul Grewal endorsed the bill, suggesting it would facilitate more financial activity moving on-chain. He specifically referenced SEC Chair Paul Atkins' leadership, emphasizing the urgent need for Congress to finalize the remaining details without further delay.
The bipartisan nature of the discussions suggests broad recognition of the need for comprehensive crypto regulation. However, remaining disagreements could still impede swift passage, particularly around the contentious issue of DeFi rules that have divided lawmakers throughout the negotiation process.
Looking Ahead: Senator Lummis's determination to advance the Responsible Financial Innovation Act next week represents a crucial step toward establishing clear regulatory frameworks for the U.S. crypto market. While challenges remain, the push for a markup hearing before the holiday recess signals renewed momentum in creating the legal clarity the industry has long sought.
