Bill Overview
Title: Responsible Self-Regulation Act of 2022
Description: This bill provides for the registration of an association of digital asset intermediaries with the Securities and Exchange Commission and the Commodity Futures Trading Commission. Upon the written request of a member of the association, a registered digital asset association is allowed to make an initial determination of the legal character of a digital asset, including as a security, an ancillary asset, or a commodity.
Sponsors: Sen. Lummis, Cynthia M. [R-WY]
Target Audience
Population: People engaging with digital asset intermediaries
Estimated Size: 5000000
- The bill specifically targets digital asset intermediaries, who are entities involved in the facilitation of transactions involving digital assets.
- Digital asset intermediaries include cryptocurrency exchanges, brokers, and wallet providers.
- The bill affects these intermediaries by requiring them to register with the SEC and CFTC, indicating regulatory oversight.
- Digital asset users and investors may indirectly be impacted through changes in how intermediaries operate, as well as through possibly increased security and clearer legal frameworks provided by intermediaries.
- Clarity on the legal character of digital assets (e.g., securities, commodities) can influence the broader digital asset market, affecting users globally.
- The bill has the capacity to ensure consumer protection, by enforcing clearer regulatory guidance and standards.
Reasoning
- Around 16% of Americans have interacted with or invested in digital assets, suggesting a significant number are aware of or influenced by the digital economy.
- Most digital asset intermediaries are small to midsize businesses, meaning impacts of compliance costs could vary widely.
- The policy aims to provide regulatory clarity, potentially fostering increased market stability and security for users and investors alike.
- Some interviewees might have direct roles in digital asset businesses, while others might primarily be users or investors.
- The $15 million first-year budget could focus on initial compliance and regulatory setup, affecting more businesses in metropolitan areas with vibrant tech or finance sectors.
- Over a 10-year horizon, the budget suggests significant allocation towards maintaining and scaling oversight.
- Direct registration costs may push smaller intermediaries to change operations, potentially benefiting larger, more established intermediaries.
- The policy's effect on the legal standing of digital assets might have global market implications, indirectly impacting U.S. users engaging with international platforms.
Simulated Interviews
Cryptocurrency Exchange Employee (San Francisco, CA)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- I think this policy brings much-needed clarity to the crypto space.
- However, I'm worried about the additional compliance costs for our firm.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 8 |
Fintech Investor (New York, NY)
Age: 35 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- This legislation could contribute to making the U.S. a leader in digital asset regulation.
- I'm optimistic but wary of potential negative impacts on innovation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
Small Business Owner (Austin, TX)
Age: 42 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- The cost of registration and compliance might be challenging for smaller companies like mine.
- I hope it will increase user trust and thus usage.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 7 |
Regulatory Compliance Consultant (Salt Lake City, UT)
Age: 50 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- This policy is likely to create more business for consultants like me.
- Long-term, it should foster a more transparent digital asset market.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Blockchain Developer (Seattle, WA)
Age: 29 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- While I support some oversight, I'm concerned about how it might affect innovation and decentralization.
- The policy could influence our development timelines and focus.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
Retired (Miami, FL)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- More regulation could make me feel safer about investing in digital assets.
- I hope it doesn’t discourage platforms I've grown comfortable with.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
College Student (Boston, MA)
Age: 22 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- As someone looking to enter the field, I hope this policy makes job opportunities clearer.
- Regulatory clarity can be a boon or a barrier.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 10 | 9 |
Software Engineer (Chicago, IL)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- I think it levels the playing field by ensuring everyone adheres to the same rules.
- However, I worry about added bureaucracy slowing down innovation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 9 |
Cryptocurrency Influencer (Atlanta, GA)
Age: 31 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- This will provide good content material for my channels and might attract a new audience interested in the regulatory aspect.
- I hope it doesn't scare off new users from joining the space.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 9 |
Digital Asset Broker (Denver, CO)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 8.0 years
Commonness: 4/20
Statement of Opinion:
- This policy gives confidence in the security of digital asset transactions.
- I'm apprehensive about the regulatory burden and how it may affect liquidity.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $15000000 (Low: $12000000, High: $18000000)
Year 2: $15000000 (Low: $12000000, High: $18000000)
Year 3: $15000000 (Low: $12000000, High: $18000000)
Year 5: $15000000 (Low: $12000000, High: $18000000)
Year 10: $15000000 (Low: $12000000, High: $18000000)
Year 100: $15000000 (Low: $12000000, High: $18000000)
Key Considerations
- The technology landscape in digital assets evolves rapidly, and the registration process must be adaptable to these changes.
- Coordination between SEC and CFTC is crucial to effectively manage the scope and overlap of regulatory responsibilities.
- The potential reclassification of digital assets by intermediaries might lead to unintended market disruptions or speculations.