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Bitcoin ETFs make case for US crypto regulation: Sen. Lummis

Thu, Jan 11, 2024, 11:00 AM

Lummis notes that SEC-sanctioned crypto funds allow expanded access for investors who "want exposure to bitcoin but are reluctant to self-custody" of digital assets. With traditional finance embracing crypto's "long-term benefits," she says that "helps make the case" for more policy guardrails in the crypto space.

However, Lummis warns the US currently lags behind in formalizing "a well-understood and secure regulatory framework" for crypto assets versus other nations. She says the approved filings show "the importance" for legislation like the bipartisan Lummis-Gillibrand Responsible Financial Innovation Act.

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Editor's note: This article was written by Angel Smith

Video Transcript

[AUDIO LOGO]

RACHELLE AKUFFO: A joyous day for crypto investors. Several exchange-traded funds tied to the spot price of Bitcoin started trading in the US today after the SEC approved 11 of those ETFs. Now, the discussion around approving spot Bitcoin ETFs has been making headlines for a while, given the SEC chairman Gary Gensler's cautious approach to cryptocurrencies and the risks associated, saying even as the regulator approved the ETFs that, quote, "investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto." But our next guest has always pushed for more crypto adoption. Joining us now is Senator Cynthia Lummis of Wyoming to discuss more. Good to see you again.

So this is obviously a very historic day here and something that I know that you've been at the forefront of. I know you are a Bitcoin bull. What does this clear up now that we have this approval from the SEC?

CYNTHIA LUMMIS: Well, Rochelle, I'm happy to see this day come because it allows people who want exposure to Bitcoin, but are reluctant to self-custody to have that exposure as part of a diversified asset allocation. When the traditional financial services industry has now adopted and recognized the long-term benefits of Bitcoin specifically as part of a diversified asset allocation, it helps make the case for having a robust regulatory framework for digital assets so that investors can begin to further diversify their investments and incorporate a long-term store of value like Bitcoin into their investment strategies.

RACHELLE AKUFFO: So Senator, in terms of conversations that you're having on the Hill about how welcome this is for some of the lawmakers there, talk about those conversations and what this also means for your legislation, your Lummis-Gillibrand legislation as well to really formulate this framework.

CYNTHIA LUMMIS: Senator Gillibrand and I, as you know, have the comprehensive piece of legislation that covers the digital asset industry and applies consumer protections to it. And so it can become a robust part of the US economy. We are now behind many countries around the world in having a well-understood and secure regulatory framework and because of that the United States risks having the credible digital asset industry move to other countries so they can begin functioning in a well-understood regulatory framework.

The fact that a Bitcoin ETF, in fact, I think 11 of them are now recognized helps, I think, make the case for the fact that Lummis-Gillibrand is a piece of legislation that is ready for prime time. That it's important that this industry have a well-understood regulatory framework that lays on top of our traditional regulatory framework in order to enjoy the benefits of consumer protection and appropriate regulation. So it helps make the case for the importance of advancing the Lummis-Gillibrand Financial Innovation Act.

RACHELLE AKUFFO: And just ever so quickly, we have about 30 seconds left, but obviously, this is good news for crypto enthusiasts. But for people who at this point still can't tell the difference between Bitcoin and altcoin or stablecoin, those consumer protections, do you feel as if there is enough protection at the moment to really offset some of the risks that that dissenting vote that we saw from the SEC brought up?

CYNTHIA LUMMIS: I don't think that there is adequate regulatory protections to assure consumers that haven't taken a deep dive into digital assets. They need to be assured that the United States is not only aware, but prepared to regulate in these areas. We need adequate staffing at both the Commodity Futures Trading Commission for Bitcoin and other commodity like digital assets and at the SEC. So it's very important that we advance legislation moving forward, so people can begin to understand the differences between Bitcoin, other digital assets, stablecoins, and involve themselves in this new economic opportunity.

RACHELLE AKUFFO: Well, certainly at the forefront of everyone's minds, especially today. Appreciate you taking the time, Senator Cynthia Lummis. Thank you so much.

CYNTHIA LUMMIS: Great to see you, Rochelle.

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Bitcoin ETFs make case for US crypto regulation: Sen. Lummis

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