Hello SOVRYN community! As I mentioned on the 44th community call, I am seeking community input on the Lummis Gillibrand bill from a number of projects (SOVRYN, BabelFish, Bankless DAO, etc) and welcome input from others you all may be affiliated with. This input to the authors of the legislation is made possible through my membership with the Digital Chamber of Commerce. Further - I am coordinating with the Payments Association in the UK, EU, and Asia for some consistency in global regulatory inputs.
Link to the Bill: Text - S.4356 - 117th Congress (2021-2022): Lummis-Gillibrand Responsible Financial Innovation Act | Congress.gov | Library of Congress
Why is this important?
If you look at the list of topics - you can see that the authors are trying to establish a comprehensive framework for regulation AND YOUR RIGHTS! As a US citizen, the tax section matters to me and will likely have global influence but the definition of SEC (securities) vs CFTC (commodities) oversight - especially with Bitcoin acknowledged by SEC as a commodity already - mean formal frameworks that could allow Sovereign wealth investment in Bitcoin on par with Gold (finally!). It touches on individual rights to hold your own digital assets! If touches on Stablecoins -which are a transactional life blood for commerce. It touches on CBDCs and open competition between them and stable coins. It touches on DAOs and exchanges. While the US is late to the party - it can have a global impact on shaping regulation and how respective nation state citizens can engage. So - why should you care - this could pave the way for massive lift to BTC price and broader adoption OR it can act as a huge brake on progress in this space.
What am I asking for?
I am asking for community members to pick their own sections of interest - not try to comment on the whole thing - and provide your thoughts, concerns, and suggestions for better wording (if possible- concerns and thoughts alone are fine too)
For example:
Section reference
- “SEC. 722A. ISSUANCE OF PAYMENT STABLECOINS."
Thoughts
- in light of recent events - this language makes sense for the regulators and -in particular - allows for more demand for US treasuries to allow for some yield on deposits. It also allows for central bank comfort as most of the existing banking infrastructure can be employed in oversight.
Concerns
- the structure here only contemplates fiat equivalent (legacy) infrastructure and seeks to limit deposit scenarios to US regulated financial institutions. This could cut out on/off ramp acceptance of funds to/from Frax, DAI, BUSD, etc unless some provision is made to define these and their allowed interaction with this framework in this or other sections of the bill
Recommended Changes
- This one is tough but I might suggest the bill’s authors make provision for “non-conforming stablecoins” to fall under CFTC oversight explicitly as a digital asset defined as a commodity for the avoidance of doubt of jurisdiction. While this does not have any direct authority over SOVRYN or BabelFish - it allows for formal interactions between the assets and regulated institutions like banks or exchanges.
Thank you to all for reading this far and I look forward to your ideas and input!
If you have a long response or prefer to send comments to me directly rather than via the forum - I am setting up the following email address and it should be live b 7/23/2022 (tomorrow) lordelvic@conationconsultingllc.com