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Kirsten Gillibrand’s Views on Cryptocurrency

Kirsten Gillibrand (born December 9, 1966)  is an American lawyer and politician serving as a United States senator from New York since 2009. She is a member of the Democratic Party and has served as a member of the U.S. House of Representatives from 2007 to 2009. [1][2][3][4]

Regulatory Framework for Crypto Assets

Kirsten Gillibrand is known to advocate for a regulatory framework for digital assets and exchanges. [8]

"The United States is a global financial leader thanks to strong regulations that protect consumers and investors.
But our lack of a clear regulatory framework for digital assets and exchanges puts American consumers and investors at risk – as we saw when FTX collapsed." - she tweeted in November 2022. [8]

In June 2022, the senator introduced the Responsible Financial Innovation Act to create a regulatory framework for digital assets.

"This bipartisan package, which would address CFTC and SEC jurisdiction, requirements, and the treatment of digital assets for tax purposes, would ultimately generate more flexibility, innovation, consumer protections, and transparency while providing more certainty and clarity to the growing digital assets industry" - she wrote [9]

The package objective is to:

  1. Create a clear standard for determining which digital assets are commodities and which are securities, providing clarity and structure for businesses and regulators.
  2. Create clear definitions for digital assets
  3. Assign regulatory authority over digital asset spot markets to the CFTC
  4. Define and create strong requirements for stablecoins that will promote faster payments and protect consumers.
  5. Create an advisory committee to develop guiding principles, empower regulatory agencies, and advise lawmakers on fast-developing technologies.
  6. Impose disclosure requirements on digital asset service providers to ensure that consumers understand the product and can make informed decisions when engaging with digital assets
  7. Require a study on digital asset energy consumption
  8. Direct the CFTC and the SEC to study and report on the development of a self-regulatory organization (SRO)
  9. Direct the CFTC and SEC to consult with the Department of the Treasury and the National Institute of Standards and Technology to develop comprehensive, principles-based guidance relating to cybersecurity for digital asset intermediaries
  10. Provide a regulatory sandbox for state and federal regulators to collaborate on innovative financial technologies, etc.

Reintroduction of Legislation To Create Regulatory Framework For Crypto Assets

On July 12, 2023, U.S. Senators Kirsten Gillibrand (D-NY), a member of the Senate Agriculture Committee, and Cynthia Lummis (R-WY), a member of the Senate Banking Committee, reintroduced the Lummis-Gillibrand Responsible Financial Innovation Act to create a comprehensive regulatory framework for assets. This legislation expands on the bill the senators introduced in 2022 and adds new consumer protections and safeguards to further strengthen the industry against fraud and bad actors while giving American innovators the chance to thrive. [5][6]

“Crypto assets are constantly evolving, and as the industry changed during the last year, Senator Gillibrand and I worked to improve our legislation to ensure it appropriately balances consumer protections while allowing innovation to continue,” said Senator Lummis. 
“Make no mistake, bad actors exist, but we cannot lose sight of the potential of crypto assets and distributed ledgers to modernize our financial industry. I’m proud to join my friend Senator Gillibrand in reintroducing the Responsible Financial Innovation Act to ensure the United States remains the global financial leader.” [5]

Senator Gillibrand also commented:

“I am proud to release this new, strengthened version of the bipartisan Lummis-Gillibrand Responsible Financial Innovation Act with my friend and partner Senator Lummis.
Over the past year, we worked together and with key stakeholders to improve our framework–we added strong new consumer protections and anti-money laundering provisions, delivered additional resources to regulatory agencies so they can enforce new regulations, and created clarity so that businesses can innovate responsibly. Congress has a duty to step in to protect consumers and root out bad actors, while also creating a transparent and accountable market. Our framework does that and we will make passing this bipartisan legislation a priority in this Congress.” [5]

This legislation places crypto assets within the regulatory perimeter, requires all crypto asset to register, addresses , safeguards consumers through enhanced disclosures and limits on crypto asset lending, closes the wash sale loophole, and codifies the criteria to determine which crypto assets are securities or commodities. [5]

The legislation also combats the use of crypto assets in illicit finance, imposes new penalties for willfully violating money laundering laws, requires to be issued by depository institutions, and provides appropriations to federal agencies to implement the policies within the bill. [5]

Introduction of Stablecoin Bill

On April 17, 2024, Kirsten Gillibrand, and Cynthia Lummis introduced the bipartisan Lummis-Gillibrand Payment Stablecoin Act, landmark bipartisan legislation that creates a clear regulatory framework for payment that will protect consumers, enables innovation, and promotes U.S. dollar dominance while preserving the dual banking system. [6]

"I'm proud to join @SenLummis to introduce the Payment Stablecoin Act. Passing a regulatory framework for stablecoins is critical to protecting consumers, promoting responsible innovation, and cracking down on money laundering and illicit finance" - the Senator tweeted[6]

She also stated in the press release:

“In order to meet the growing demand for our ever-evolving financial industry, we need to craft legislation that strikes the careful balance of establishing a clear and workable framework for stablecoins while protecting consumers,”

“Together, Senator Gillibrand and I worked to preserve our dual banking system and install guardrails that protect consumers and prevent illicit finance while ensuring we don’t derail innovation. Passing this bipartisan solution is critical to maintaining the U.S. dollar’s dominance and making certain the U.S. remains the world leader in financial innovation.”[7]

The Lummis-Gillibrand Payment Stablecoin Act:

  1. Protects consumers by requiring stablecoin issuers to maintain one-to-one reserves and prohibiting unbacked, algorithmic stablecoins.
  2. Prevents illicit or unauthorized use of stablecoins by issuers and users.
  3. Creates federal and state regulatory regimes for stablecoin issuers that preserve the dual banking system. [7]

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Kirsten Gillibrand’s Views on Cryptocurrency

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June 5, 2024

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