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How Will Cynthia Lummis’s Proposed Bill Affect Bitcoin

Senator Cynthia Lummis, a rancher and Republican senator from Wyoming introduced a comprehensive and sweeping bill concerning Bitcoin and crypto regulations. The RFI (Responsible Financial Innovation) Act was released on June 7th by the Senator alongside Kristen Gillibrand, a New York securities attorney, and Democrat senator.

Related Reading | Bitcoin Open Interest Falls As Price Dips Below $31,000

According to Lummis, the proposed bill will lead to cryptocurrency adoption into the traditional financial system. Thus, enabling the digital currencies to become accepted as commodities.

Clear Distinction Between Bitcoin From Other commodities

The senator explained that, in promoting the crypto bill before its deployment, if the bill becomes passed into law, it will introduce a change. She said there would be a clear difference between securities, commodities, cryptocurrencies, stablecoins, collectibles, and NFTs.

Furthermore, the case of the distinct classification of securities and commodities will be determined by Bitcoin, as it possesses the most possibility of a commodity.

BTC moving sideways on the daily chart. Source: BTCUSD Tradingview

Furthermore, Bitcoin has a strong resemblance to a commodity in its volatility because of the demands for a scarce virtual asset with a worldwide macro price association with the price of energy. Also, Bitcoin’s inflation is caused by complex rigs that facilitate BTC token mining programs that anyone can download.

In a recent interview, Sen. Lummis was asked about her view of the SEC chairman’s stance on digital currencies being securities. She responded by saying that she agreed with his view.

Also, Lummis noted that the two leading cryptos, Bitcoin and Ethereum, aren’t considered securities. The Senators even added that the CFTC (Commodities Futures Trading Commission) should regulate them, as reported by Market Watch.

This news isn’t a little step but a product of long hours of consultation with mining and industry reps to create legislation. Lummis stated that she hopes this proposal bridges a concise regulation and, at the same time, doesn’t suffocate advancement.

Lummis reassured that there isn’t a need to worry, as it’s not needful to overregulate Bitcoin. If they try to do so, innovation of the asset will transition to other countries where it’s more accepted.

Michael Saylor’s Involvement In The Legislation

Another thing she stated was that the legislation would clearly outline the obligations of the two present regulators. These regulators include the CFTC and the US SEC (Securities and Exchange Commission). It advances the existing regulations for cryptocurrencies without introducing any newer regulatory entities.

Related Reading | U.S. Macro Pressure Responsible For Entire Bitcoin Downtrend

Senator Lummis’ leading advisor is Michael Saylor, the Founder and Chief Executive Officer of MicroStrategy. She explained that he was one of the first people who’d seen the proposed bill, given his years of experience in crypto regulatory advocacy, investment, and cryptocurrencies.

In an interview with Lex Fridman on his show “Tech and Science”, the MicroStrategy boss refused to differentiate digital currencies from stocks. Also, he stated that bitcoin and securities aren’t the same.

Featured image from The Pexels, chart from TradingView.com

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Strike Brings The Lightning Network To Every US Merchant. The Market Yawns

The Strike announcement was an atomic bomb, but the market is not impressed. Since Jack Mallers wasn’t there to reveal an Apple deal as rumored, the general public was somewhat disappointed. However, the Strike CEO announced something much bigger. The company partnered with Blackhawk and NCR to bring Lightning Network transactions to Point Of Sale terminals all over the United States. Plus, with Shopify for the e-commerce equivalent. 

The man was playing third-dimensional chess with us. Mallers titled the presentation “The King’s Gambit,” an alternative to the “pawn to e4” chess opening he usually mentions. Here’s the video:

Inside Strike ‘s Announcement

The presentation started with a brief history of payment networks, starting in 1949 with the invention of the Diner’s Club card. The first revelation comes next: payment networks have not evolved or innovated in 50 years. The legacy financial system is still using this ancient technology like there’s no tomorrow. 

These merchants are adopting Bitcoin for payment this year. (Jack Ballers – Strike). pic.twitter.com/FF57vYF7BH

— Big Sky HODL ⚡ CO Beef Initiative (@BigSky_HODL) April 7, 2022

As usual, Strike’s Jack Mallers proposes to the world that it should join an “open payment standard.” That it should use a “superior payment network.“ And with these partnerships, he finally accomplishes it. Strike will use the bitcoin network as payment rails to enable Lightning Network transactions in a high percentage of merchants in the US. According to Mallers, bitcoin will finally be “embedded into our lives.”

Another interesting part of the story is Senator Cynthia Lummis’ support. According to a letter she sent to Mallers, she says “I am working to bring smart legislation to the digital assets space, so that innovations like this can be integrated into America’s financial services industry.“ That’s reassuring. Because chances are legacy players will fight this. 

thank you @jackmallers. you're an incredible inspiration.

— jack⚡ (@jack) April 7, 2022

The senator will speak tomorrow, on Bitcoin 2022’s final day of conference. 

BTC price chart for 04/08/2022 on Oanda | Source: BTC/USD on TradingView.com
How Did The News Affect The Market?

The general public was expecting Strike to announce an Apple partnership that would’ve made bitcoin’s price pump to infinity. It didn’t get it. So, bitcoin traded around the $43K range the whole day and acted unaffected in front of Jack Mallers’ news. It seems like the market didn’t even flinch. 

What @jackmallers just announced is going to kick off the #Bitcoin circular economy in a massive way.

I think few understand that the inability to easily use BTC is what makes it difficult to accept as a daily driver.

Medium of exchange is here. Next stop, Unit of Account.

— Guy Swann ⚡ (@TheGuySwann) April 7, 2022

More nuanced than an Apple partnership, it will take months, maybe years to see the new’s impact. On the one hand, people aren’t incentivized to spend their bitcoin. As long as its price is increasing, people will want to hold the asset. On the other, this provides a non-KYC way to spend your bitcoin. A non-KYC way of paying. The Strike announcement makes bitcoin a competing Medium of Exchange and puts it into every store in the US.

Is that fact priced in? 

What Does The Twitterati Think About Strike ‘s News? 

The Guy Swann sums up the announcement by declaring it’ll “kick off the Bitcoin circular economy in a massive way. I think few understand that the inability to easily use BTC is what makes it difficult to accept as a daily driver.” For his part, podcaster Anthony Pompliano said, “Hundreds of millions of people can now spend bitcoin or dollars across the Lightning Network instantaneously, completely for free at every major US retailer.”

Strike CEO @jackmallers and Strike just announced partnerships with Shopify and other leading payment providers.

Hundreds of millions of people can now spend bitcoin or dollars across the Lightning Network instantaneously, completely for free at every major US retailer.

— Pomp 🌪 (@APompliano) April 7, 2022

In a phenomenal thread, Economist Lyn Alden explains the implications. “The more places that accepted BTC at point of sale (on-chain or Lightning or otherwise), the more permissionless the whole network is. This is because, if all you can do with BTC is convert it back into fiat on a major exchange, then it’s easy to isolate it, effectively blacklist addresses, etc.”

This is because, if all you can do with BTC is convert it back into fiat on a major exchange, then it's easy to isolate it, effectively blacklist addresses, etc.

But if you can directly spend it on goods and services across companies and jurisdictions, it's harder to isolate.

— Lyn Alden (@LynAldenContact) April 7, 2022

On the other hand, notorious YouTuber Bitboy Crypto misses the point completely and says. “Michael Saylor: Never Sell your Bitcoin (crowd goes WILD) Jack Mallers: Here’s a great way to spend your Bitcoin (Crowd goes WILD) Like does no one see the disconnect here?” 

Michael Saylor: Never Sell your Bitcoin (crowd goes WILD)

Jack Mallers: Here’s a great way to spend your Bitcoin (Crowd goes WILD)

Like does no one see the disconnect here?

— Ben Armstrong (@Bitboy_Crypto) April 7, 2022

Matt Ahlborg, head of research at Bitrefil, gives Bitboy the 411. “What Jack Mallers is really saying is that you will be soon be able to offload your Bitcoins in the real world without KYC’ing through an exchange first.” While Jack Dorsey keeps it short and sweet by saying, “thank you Jack Mallers. you’re an incredible inspiration.”

What Jack Mallers is really saying is that you will be soon be able to offload your Bitcoins in the real world without KYC'ing through an exchange first.

If this is true, it is actually an extremely substantive and important development for Bitcoin.

— Matt Ahlborg (@MattAhlborg) April 7, 2022

The whole world changed after that Strike announcement. It might feel similar, but we’re living in bitcoin world now. Make of that what you will. 

Featured Image: Jack Mallers at Bitcoin 2022 taken from this tweet | Charts by TradingView

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Do Senator Lummis & Toomey’s Bitcoin Holdings Pose Ethical Concerns? Let’s Argue

It’s completely legal for U.S Senators Cynthia Lummis and Pat Toomey to own Bitcoin or crypto-related investments. They just have to disclose it. Does this pose an ethical dilemma? Senators are on the frontlines of policymaking, and the rules around cryptocurrencies are still being written. On the other hand, it’s illogical to think that Senators can’t handle money or have investments. And that’s what cryptocurrencies are. Is there a conflict of interest here? Let’s argue.

As a basis, we’ll use and analyze this article, based on the “Wall Street Journal review of public financial disclosures.”

How Much Bitcoin Do Lummis And Toomey Have?

Senator Cynthia Lummis is on the frontlines of the battle for better legislation around Bitcoin and cryptocurrencies in general. However, we’re centering our discussion around her and Pat Toomey because they’re literally the only Senators that disclosed crypto-related investments. An incredible stat that shows just how early we are. But enough about that, let’s go to the numbers.

Reportedly, Cynthia Lummis owns 5 whole BTC. Or, as the WSJ puts it:

“Ms. Lummis’s roughly $250,000 of bitcoin makes her the most heavily invested U.S. lawmaker in the digital asset.”

For his part, Pat Toomey went for Bitcoin and Ethereum exposure via Grayscale:

“In mid-June, Mr. Toomey bought $2,000 to $30,000 of stock in Grayscale Bitcoin Trust and Grayscale Ethereum Trust, investment vehicles that seek to track the coins’ prices. He said the holdings are part of a diverse portfolio.”

So far, so good. However…

What Ethical Concerns Are There?

Recently, via Instagram stories, Alexandria Ocasio-Cortez revealed that she’s not exposed to cryptocurrencies in any way. “I don’t think members of Congress should own / trade individual stocks and I choose not to own any so that I can remain impartial in policymaking,” she said. And later added, “I want to do my job in the most ethical and impartial manner possible.” Does she have a point?

Back to the article, let’s quote Lee Reiners, “executive director of the Global Financial Markets Center at Duke University and a former official at the Federal Reserve Bank of New York.”

“These two senators are the most vocal when it comes to favorable cryptocurrency regulation. It’s not to say they are motivated by personal financial interest, but it’s fair to question their advocacy. It’s problematic given their holdings.”

But, is it problematic, though? Let’s give the Senators the right to reply. 

BTC price chart for 12/21/2021 on Bitstamp | Source: BTC/USD on TradingView.com
How Do Lummis And Toomey Respond?

In a recent interview, Toomey said, “Following that logic, then I guess no one in the Senate can invest in anything. That would be ridiculous.” Plus, let’s remember, it’s completely legal for them to do so. In Lummis’ case, take into account that “her bitcoin is part of a broad portfolio that includes her family’s cattle ranches.” The WSJ quotes her:

“Somebody said, ‘She should sell her bitcoin.’ It’s like, well, OK, it’s a commodity. Should I also sell my cows? Should I sell my mutual funds? Should I sell my retirement fund, just because it might be invested in something that is a great store of value?”

There’s another factor, and this is crucial. The Senators also “say their experience with cryptocurrency gives them expertise on a subject that few on Capitol Hill have studied.” Can you understand Bitcoin if you’ve never used it? Don’t you need to be experienced in something to be able to make informed decisions? If all of the other Senators don’t have cryptocurrency exposure or any experience with this novel technology, how can they be trusted to dictate policy? 

It’s scary to think that the people deciding over what could become the new paradigm, the evolution of money, have never used the technology and solutions it provides. And that’s the other side of this debate.

Featured Image: jensjunge on Pixabay | Charts by TradingView