Lummis Crypto Bill: Market Structure, Stablecoins, and BITCOIN Act

Senator Cynthia Lummis of Wyoming has introduced or co-authored four major crypto bills since 2022: the Responsible Financial Innovation Act (a comprehensive market-structure framework co-written with Senator Kirsten Gillibrand), the Lummis-Gillibrand Payment Stablecoin Act, the BITCOIN Act of 2025 creating a Strategic Bitcoin Reserve, and a standalone digital asset tax bill. None has passed in its original form, but their core ideas have moved into the legislation now advancing in both chambers, and one — the stablecoin framework — became law in a successor bill.

Responsible Financial Innovation Act

The Responsible Financial Innovation Act is the anchor of Lummis’s crypto agenda. She and Gillibrand first introduced it in June 2022 as S.4356, then reintroduced it in July 2023 as S.2281. The bill spans eight titles covering definitions, taxation, securities and commodities classification, consumer protection, stablecoins, banking access, and interagency coordination.¹

Commodity or Security

The bill’s most consequential move is a rule for sorting digital assets. Assets that convey traditional investor rights — dividends, liquidation preferences, or a financial interest in a business entity — stay under the SEC as securities. Everything else falls to the CFTC as a commodity, and the bill explicitly names bitcoin and ether in that category.²

For tokens caught between those poles, the bill creates a category called “ancillary assets”: digital assets that benefit from entrepreneurial or managerial effort but give holders no debt, equity, or profit-sharing rights. Issuers file tailored disclosures with the SEC twice a year rather than fully registering, and compliance carries a legal presumption that the asset is a CFTC-regulated commodity. Once an asset is “fully decentralized” — no entity’s efforts primarily driving its value — the issuer can stop filing while keeping the commodity classification.³

Customer Protections

The 2023 reintroduction nearly doubled the consumer protection provisions in response to the 2022 exchange collapses, most notably FTX.⁴ Digital asset intermediaries would maintain cryptographically verifiable proof of reserves, subject to unannounced audits by independent accountants, with discrepancies reported to regulators within one day. Rehypothecation of customer crypto is banned. The bill also requires plain-language customer agreements, CEO compliance attestations, and advertising standards, and it directs the SEC, CFTC, Treasury, and NIST to develop cybersecurity guidance. Digital asset exchanges would register as financial institutions under the Bank Secrecy Act.⁵

Tax Pieces

The bill’s tax title established a $200 de minimis exemption for using virtual currency to buy goods and services, clarified that miners and staking validators are not “brokers,” and specified that mining and staking rewards are not gross income until disposed of.¹ The 2023 version added a wash-sale rule for crypto.⁴ These provisions were later spun into a standalone tax bill in 2025.

Lummis-Gillibrand Payment Stablecoin Act

When comprehensive legislation stalled, Lummis and Gillibrand narrowed their focus. On April 17, 2024, they introduced the Payment Stablecoin Act (S. 4155). It required one-to-one reserves in cash and cash equivalents, prohibited algorithmic or unbacked stablecoins, and mandated that issuers operate through subsidiaries of depository institutions or state-chartered trust companies. Customer stablecoins and reserves had to be strictly segregated from issuers’ own assets, rehypothecation was prohibited, and an FDIC receivership regime would treat stablecoins as customer assets rather than assets of the estate. State trust companies could issue up to $10 billion under state supervision, with the Federal Reserve gaining supervisory authority over third-party service providers.⁶

The Payment Stablecoin Act itself did not pass. Its architecture, however, moved into the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), which President Trump signed on July 18, 2025. The GENIUS Act carries the same 100% reserve requirement, prohibition on algorithmic stablecoins, dual federal-state oversight, and customer priority in insolvency. It also bars issuers from paying interest or yield to holders and requires monthly public reserve disclosures.⁷⁸

BITCOIN Act of 2025

On March 11, 2025, Lummis introduced the BITCOIN Act of 2025 (S.954) with Representative Nick Begich. The bill would codify President Trump’s executive order creating a Strategic Bitcoin Reserve and direct the Treasury to buy 200,000 bitcoins per year for five years, reaching one million bitcoins.⁹¹⁰

The reserve would consist of geographically dispersed cold storage facilities overseen by the Treasury Secretary, with security coordination from Defense and Homeland Security. Bitcoin already held by federal agencies, including U.S. Marshals Service seizures, would be consolidated in. Holdings would be locked for at least 20 years; after that, the Treasury Secretary could recommend selling up to 10% every two years, with proceeds applied to reducing the national debt.¹¹

Funding comes from three sources inside the Federal Reserve System: reducing the Fed’s surplus fund cap from $6.825 billion to $2.4 billion, redirecting the first $6 billion of annual Fed remittances to Treasury for fiscal years 2025 through 2029, and revaluing outstanding gold certificates at current market prices, with Federal Reserve banks remitting the difference.¹¹

The bill was referred to the Senate Banking Committee on the day of introduction with five cosponsors. As of mid-2026, no committee hearings or floor votes have occurred.⁹

Digital Asset Tax Bill

On July 3, 2025, Lummis introduced a standalone tax bill expanding the tax pieces from the Responsible Financial Innovation Act. She had tried to attach them to President Trump’s reconciliation spending bill, but they were excluded from the version the Senate passed on July 1, 2025. The Joint Committee on Taxation estimated the standalone bill would generate about $600 million in net revenue over ten years.¹²¹³

The bill excludes gains or losses from digital asset transactions under $300 from gross income, with a $5,000 annual cap and inflation adjustments starting in 2026. The exemption does not apply to transactions for cash, cash equivalents, or other digital assets. Mining and staking rewards are not recognized as income until sold, at which point they are taxed as ordinary income. The 30-day wash-sale rule is extended to digital assets, preventing loss-harvesting through quick repurchase. Digital asset lending agreements are generally not treated as taxable events, aligning them with securities lending. Dealers and traders of actively traded digital assets can elect mark-to-market accounting.¹²¹³

Where the Ideas Stand Now

The Lummis-Gillibrand market-structure proposals have never reached a floor vote in original form, but their framework is being absorbed into the legislation now moving in both chambers.

In the House, the CLARITY Act (H.R. 3633) passed on July 17, 2025, on a bipartisan 294-134 vote. It grants the CFTC exclusive jurisdiction over digital commodity spot markets and the SEC authority over digital assets that qualify as securities, echoing the split Lummis and Gillibrand proposed in 2022. It also creates a $75 million exemption from Securities Act registration for digital commodity issuers, requires exchanges to register under the Bank Secrecy Act, and exempts certain decentralized finance activities from SEC and CFTC regulation.¹⁴

Senate work is split between two committees. The Senate Agriculture Committee advanced the Digital Commodity Intermediaries Act on January 29, 2026, on a 12-11 party-line vote, the first time a major crypto market-structure bill cleared a Senate committee. That bill gives the CFTC new authority over spot digital commodity markets, requires customer fund segregation, and includes protections for software developers.¹⁵

The Senate Banking Committee released a substitute amendment to the CLARITY Act in January 2026 that titles its first section the “Lummis-Gillibrand Responsible Financial Innovation Act of 2026,” folding the Lummis-Gillibrand framework directly into the market-structure vehicle. A scheduled markup was postponed indefinitely after Coinbase and the American Bankers Association raised objections. By May 2026, Chairman Tim Scott, Lummis, and Senator Thom Tillis released an updated CLARITY Act text described as a manager’s amendment incorporating months of bipartisan negotiation.¹⁶

Lummis’s Remaining Time in the Senate

Lummis chairs the Senate Banking subcommittee on digital assets and has been the chamber’s leading voice on the topic since 2022.¹⁷ On December 19, 2025, she announced she would not seek reelection, telling reporters, “I am a devout legislator, but I feel like a sprinter in a marathon. The energy required doesn’t match up.” She pledged to spend her remaining time working with the Trump administration to pass digital asset legislation.¹⁸ Her term runs through early 2027, which sets the practical window for anything still bearing her name to move.

1
U.S. Senate Committee on Banking, Housing, and Urban Affairs. Lummis-Gillibrand Introduce Landmark Legislation to Create Regulatory Framework for Digital Assets
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CNBC. Bipartisan Crypto Bill From Lummis and Gillibrand Wants to Empower CFTC, Treat Digital Assets Like Commodities
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U.S. Senator Cynthia Lummis. Lummis-Gillibrand Responsible Financial Innovation Act Section by Section
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Gibson Dunn. Lummis-Gillibrand Responsible Financial Innovation Act: An Overview of New Provisions in the Reintroduced Bill
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U.S. Senator Cynthia Lummis. Lummis-Gillibrand Responsible Financial Innovation Act of 2023 Section by Section
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U.S. Senator Kirsten Gillibrand. Lummis-Gillibrand Introduce Bipartisan Landmark Legislation to Create Regulatory Framework for Stablecoins
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The White House. Fact Sheet: President Donald J. Trump Signs GENIUS Act Into Law
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Federal Register. GENIUS Act Implementation
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Congress.gov. S.954 – BITCOIN Act of 2025
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Congressman Nick Begich. Congressman Nick Begich and Senator Lummis Introduce Landmark Bitcoin Act
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U.S. Senator Cynthia Lummis. BITCOIN Act of 2025
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U.S. Senator Cynthia Lummis. Lummis Unveils Digital Asset Tax Legislation
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The Hill. Cynthia Lummis Introduces Crypto Tax Legislation
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Latham & Watkins. US Crypto Policy Tracker – Legislative Developments
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Forbes. Senate GOP Advances Crypto Bill Over Democratic Objections
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U.S. Senate Committee on Banking, Housing, and Urban Affairs. Chairman Scott, Senators Lummis, Tillis Release Market Structure Bill Text Ahead of Banking Committee Markup
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Roll Call. Cynthia Lummis to Retire From Senate
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Wall Street Journal. Crypto Ally Cynthia Lummis to Retire From Senate