This is a record of the Responsible Financial Innovation Act (RFIA) — commonly known as the Lummis-Gillibrand bill — as proposed in the US Senate in 2022. It's kept here as a historical snapshot of a specific legislative proposal at a specific point in time, not a statement of current US crypto law, which has moved on considerably since.
What was the bill trying to solve?
At the time, US digital asset regulation was split awkwardly between agencies with overlapping and disputed jurisdiction, which created genuine uncertainty for crypto businesses trying to work out which regulator's rules actually applied to them. The RFIA was described as the first genuinely bipartisan legislative proposal aiming to establish clarity on that jurisdictional question.
How would the bill have divided regulatory authority?
Six elements defined the proposal: the Commodity Futures Trading Commission (CFTC) would become the primary regulator for most digital assets; the SEC would apply periodic disclosure requirements specifically to digital asset issuers; digital asset service providers generally would face their own disclosure obligations; new prudential rules would govern payment stablecoin issuers; Decentralised Autonomous Organisations (DAOs) would be classified as business entities for legal purposes; and cryptocurrency taxation would be adjusted in ways intended to encourage digital asset use rather than discourage it.
What was the "ancillary assets" concept?
The bill proposed redefining jurisdictional authority over so-called "ancillary assets" specifically to reduce the overlap and disputes between SEC and CFTC authority that had made compliance genuinely confusing for businesses trying to determine which agency's rules governed a given token.
Why did stablecoins get specific attention?
The bill followed the collapse of the UST stablecoin in May 2022, a high-profile failure that exposed how little oversight existed over whether a stablecoin actually held the backing it claimed to. The proposal would have required stablecoin issuers to maintain proper backing and ensure users could be compensated if something went wrong, with the US Treasury gaining enforcement authority over sanctions compliance in this space specifically.
What else did the proposal include?
The bill proposed an Advisory Committee on Financial Innovation, bringing together industry, regulators, and state representatives to help guide how digital asset policy developed going forward — recognising that a single piece of legislation, however comprehensive, wasn't going to be the final word on a fast-moving asset class. For how KYC obligations apply to crypto businesses regardless of how this specific bill's provisions eventually played out, see KYC for crypto.
