Latest Developments in U.S. Cryptocurrency Legislation: Senator Gillibrand Advocates for Targeting Stablecoins First, Warning Against Inaction Following the Next FTX Crisis
Democratic Senator Kirsten Gillibrand, Alongside Crypto-Friendly Senator Cynthia Lummis, Advocates for the Responsible Financial Innovation Act (RFIA)
In an interview on April 8, Senator Kirsten Gillibrand stated that 2025 will be a significant turning point for cryptocurrency legislation in the United States. After three years of revisions, the RFIA has finally entered congressional discussion, with the initial focus on “stablecoins” and “market structure.” Gillibrand candidly remarked that if legislation is not enacted soon, the next FTX disaster is imminent.
Gillibrand Foresees the Future and Dedicates Efforts to Revising Crypto Legislation
In 2022, Gillibrand partnered with Lummis to introduce a cryptocurrency legislative proposal, which initially received little attention. Now, following the FTX collapse and rampant fraud, U.S. Congress and regulatory bodies are beginning to take cryptocurrency legislation seriously. She noted that her initial motivation stemmed from recognizing the potential of cryptocurrency and blockchain technology to significantly improve financial inclusion and data transparency, as well as their applicability in fields such as healthcare, identity verification, and AI.
Stablecoins are the Easiest to Address, Starting with This Segment
Gillibrand emphasized that their legislative design is clear, aiming to break through congressional barriers with this “simple and approachable” bill:
- Each stablecoin must have a 1:1 reserve in U.S. dollars.
- Clear regulations on who can issue and what kind of oversight is required.
- Transparency, safety, and accountability.
Gillibrand, with a Background in Securities Law, Asserts Cryptocurrency Can Be Regulated
She also stressed that the narrative of cryptocurrency being unregulatable must end: “The credit default swaps (CDS) during the 2008 financial crisis were truly complex, yet I understood them. Cryptocurrency is merely a new type of asset, fundamentally similar to previous financial products.” She pointed out that the U.S. has all the necessary tools, whether for securities, banking, or futures regulation, but legislation has yet to catch up.
If Legislation is Not Enacted, the Next FTX is Coming
Gillibrand believes that FTX’s collapse was due to a lack of regulatory framework, compounded by its operations outside U.S. jurisdiction. She warned that if another similar collapse occurs, countless American retail investors will suffer. She criticized some officials for adopting an “ostrich mentality,” pretending the problem does not exist.
State Bank Defrauded of $40 Million, Highlighting the Urgency for Legislation
She cited an example where a state bank in Kansas was defrauded of $40 million by an overseas scam group through a fictitious crypto investment scheme. Although some funds were recovered through transaction records, she pointed out: “The transparency of blockchain is an advantage; if there were appropriate regulations, this money should never have left.”
Both Chambers of Congress Have Stablecoin Bills, Need Consensus and Summation
Currently, the Senate has the “Genius Act” proposed by Gillibrand and Lummis regarding stablecoins, while the House bill is preparing for a vote. However, Gillibrand noted that the two bills differ slightly, and he hopes to consolidate opinions and incorporate the consensus on stablecoin provisions into the market structure legislation.
A Key Focus: Preventing Chinese Issued Stablecoins from Disrupting the U.S. Market
Gillibrand stressed that U.S. legislation must stipulate: “Any crypto asset sold or issued within the U.S., regardless of whether it is issued by China, must comply with the same set of rules.” He is concerned that if competing countries (like China) evade U.S. regulation, they may exploit stablecoins for disruption.
Defining Asset Types is Key: Securities, Commodities, or Jokes
Gillibrand also revealed that how to define asset types is crucial to the legislation:
- Decentralized assets like Bitcoin (BTC) with no issuer: commodities.
- If a coin’s price is closely tied to a company’s performance: initially deemed a security.
- Coins like Trump Coin (TRUMP): collectibles.
He believes a “multi-agency review mechanism,” including Treasury, SEC, and CFTC, should discuss which category each crypto asset falls into.
Mitigating the Dominance of Meme Coins: Warning Labels Required
Gillibrand expressed concern over the recent proliferation of meme coins and advocates for warning labels. Similar to the health warnings on cigarette packages: “Consumers should be clearly informed that these hold little value, and they could lose everything.”
Legislative Timing is Ripe; First Formal Bill Expected in 2025
Gillibrand emphasized that Congress has a rare opportunity to achieve bipartisan consensus. Several cryptocurrency bills have already passed committee review, and he anticipates that the first cryptocurrency bill could pass within this year. He also urges industry stakeholders and the general public to actively participate: “Even if you can’t meet with the lawmakers directly, make sure to communicate your business needs clearly to their aides, helping them understand the industry.”
Not to Stifle Innovation but to Enable Sustainable and Robust Progress
Gillibrand’s position is clear; she states that legislation aims to make the cryptocurrency industry safe, reliable, and capable of long-term development. Furthermore, she believes:
- The potential of cryptocurrency technology is immense and should not be obscured by meme coins or low-quality projects.
- Clear regulations are necessary to protect retail investors from scams.
- Only through U.S. legislation and regulations can the country become a “trusted nation” within the global financial center.
Risk Warning
Investing in cryptocurrency carries a high level of risk; its price may be highly volatile, and you could lose your entire principal. Please assess risks carefully.
