Senator Lummis believes that Bitcoin is a commodity that will eventually become a currency
Senator Cynthia Lummis recently spoke with CNBC’s Chuck Todd on the status of Bitcoin and the regulatory measure she co-authored with Senator Gillibrand.
Senator Cynthia Lummis of Wyoming has advocated for Bitcoin as a future currency in an interview. “Is Bitcoin a money or a commodity?” began the interview. Senator Lummis reacted swiftly and confidently:
“I am a proprietor of [Bitcoin], a commodity. I think it will become money at some point, but for the time being, it is a commodity similar to cattle, wheat, and gold. At some time, it will become a form of payment… and it is going to happen very quickly.”
Lummis cited the development of the Bitcoin payment technology, Lightning Network, to justify her optimism. She observed that Bitcoin originated from a whitepaper that omitted payment methods. Lightning Network fills this need by introducing a payment mechanism for Bitcoin, paving the way for additional innovation in the payment arena.
If it is denominated in US dollars, is it a currency?
In response to Lummis’ comments, NBC News correspondent Chuck Todd said that since Bitcoin and other cryptocurrencies are denominated in US dollars, they cannot function as currencies.
Lummis said that Chris Giancarlo purposefully created this currency during his stint as Chairman of the US Commodity Futures Trading Commission (CFTC) to safeguard the international position of the US dollar. As Lummis put it:
“[Giancarlo] recognized correctly that we want Bitcoin and other cryptocurrencies to be denominated in US dollars…” That, I believe, is critical if the US dollar is to remain the global reserve currency.”
How is this regulated?
Todd subsequently inquired about the appropriate regulatory strategy for Bitcoin and other cryptocurrencies, acknowledging the duality. Lummis said once more firmly that it will be governed as both a commodity and a stock.
She said that such a regulation proposal was included in the bill co-authored by Senator Kirsten Gillibrand and herself and scheduled to be introduced in April. Additionally, she stated:
“It will be governed by both, just as conventional assets are already controlled. The Commodity Futures Trading Commission will regulate it like a commodity, and it will also have spot and futures markets. Consumer protection and other required rules will be regulated by the SEC [the US Securities and Exchange Commission].”
Additionally, she said that their law includes a provision aimed at preventing initiatives from being halted due to fear of the unknown. According to Lummis, the new measure would also propose the establishment of a controlled sandbox environment that will enable individuals to freely construct and innovate.