The Lummis-Gillibrand Crypto Bill Provision That Has FIs on Edge

Source: American Banker

A bipartisan bill aiming to establish a broad framework for regulating digital assets could make it easier for financial technology companies to access Federal Reserve bank accounts.

The Responsible Financial Innovation Act, introduced by Sens. Cynthia Lummis, R-Wyo., and Kirsten Gillibrand, D-N.Y., on Tuesday morning, includes a provision stipulating that any depository institution with a state charter is entitled to an account at a Federal Reserve bank, regardless of whether they are federally insured or supervised.

This puts the bill in the middle of a contentious dispute between traditional banks and their tech-based competitors. 

Still, the Lummis-Gillibrand bill is being lauded by both advocates and opponents as a watershed moment for the crypto industry. Along with being the first piece of digital asset legislation to be sponsored by both a Democrat and a Republican, it is also among the most encompassing proposals put forth to date, ranging from defining key terms to outlining a tax regime for the space. 

The consensus view among analysts and industry insiders is that the Lummis-Gillibrand bill is unlikely to be signed into law during this Congress. With midterm elections less than five months away and a litany of other, more pressing matters to attend to, Stephen Aschettino, head of fintech at the law firm Norton Rose Fulbright, said the odds of this or any other crypto legislation reaching President Joe Biden’s desk are slim.