Lummis is influential when it comes to shaping financial policies to include digital assets, an area that has previously lacked leadership and understanding in the US government. She has proposed amendments to bills targeting blockchain technology, sponsored a significant bill on regulations for cryptocurrency, and formed a financial innovation caucus.
Lummis also embraces her role of cryptocurrency educator for her colleagues in Congress, arguing that digital assets are legitimate investments, hedges against inflation or financial upheaval, and can be used as financial tools for underserved communities, rather than for funding criminal activity.
Personal history
Lummis was born in 1954 in Cheyenne, Wyoming. Her family was involved in local politics, with both her father and brother chairing the Laramie County Republican Party, and her father serving on the board of commissioners. She graduated from the University of Wyoming, earning both a Bachelor of Science in 1978 then a Juris Doctor a few years later.
Lummis has had a long career in politics, first elected to the Wyoming House of Representatives in 1978 when she was 24. She served as Treasurer of Wyoming from 1999 to 2007 and was a member of the US House of Representatives from 2009 to 2017. She was elected to the US Senate in 2020, becoming the first woman to represent Wyoming in the Senate.
Role in the cryptocurrency community
Lummis first purchased bitcoin in 2013 after hearing about it from her son-in-law and is now a self-described HODLer. While her personal portfolio comprises solely bitcoin, she says she appreciates newer blockchain technology innovations like the Lightning Network and stablecoins.
In early 2021, Lummis added laser eyes to her Twitter profile picture, delighting members of the crypto community. The photoshopped picture was part of an internet meme trend to indicate that one was bullish on Bitcoin.
Amendment to the infrastructure bill
In the spring of 2021, U.S. President Joe Biden proposed an infrastructure bill to help pay for a $1 trillion investment in new railways, roads, and utilities. The bill included new rules for reporting digital assets to the IRS (Internal Revenue Service, the body responsible for collecting US federal taxes), to produce a projected $28 billion extra in tax revenue.
The bill encountered backlash in the crypto community, with many criticizing it as too broadly written and threatening to users’ privacy. Much of the controversy focused on the term “digital asset broker,” a definition that could be interpreted to include software developers and crypto miners, that would complicate tax reporting requirements for builders rather than focusing on investors. Industry leaders feared this definition, and change in the law, would harm innovation, curb investment, and possibly cause development to move overseas.
Lummis partnered with Senators Ron Wyden (D) and Pat Toomey (R) to create an amendment that clarified the term “broker” so that it wouldn’t apply to miners or software developers. She reached out to the crypto community for support, tweeting multiple times a day and giving interviews.
“Every call, tweet and email helps,” she tweeted. “I know many of you aren’t all that political so thank you for coming out of your comfort zone to advocate for the future. #bitcoin”
The amendment was blocked over an unrelated issue when another senator tried to attach a proposal to boost military spending. However, Lummis and her colleagues came to a compromise to ensure that the term “broker” would exclude miners, node operators, and wallet manufacturers.
In August of that year, fears were further put aside when the US Treasury Department stated it will not target non-brokers.
Although the amendment did not make it into the final bill, Lummis earned admiration from crypto industry leaders who saw her as a champion of digital currencies and the values of privacy. It also put digital currencies on Congress’s radar as legitimate financial assets.
Amendment to Endless Frontiers Act
In May 2021, Lummis sponsored an amendment to the Endless Frontiers Act, a bill that would create a new technology directorate (section of the government in charge of specific activities). The amendment added blockchain ledgers as another focus area to be studied by the directorate. While the amendment passed the Senate, the House never took up the measure.
Financial Innovation Caucus
Lummis launched the Financial Innovation Caucus with Senator Kyrsten Sinema (D) in May 2021, aimed at studying financial technology issues, including digital currencies, payments, consumer protections, and settlements. The caucus’s goal is to provide a modernized, unified regulatory framework that encourages innovation.
Educating her colleagues in Congress on digital assets and the crypto economy has been a top priority for Lummis, and the caucus focuses on bringing in speakers and resources to enable discussions with lawmakers. “The need for some statutory framework is growing stronger every day because the advancements in the technology are outstripping the Congress’s ability to really understand and embrace this subject,” Lummis told CoinDesk.
Responsible Financial Innovation Act
In June 2022 Lummis and Senator Sinema co-sponsored a significant crypto bill titled the Responsible Financial Innovation Act. The bill classifies digital assets as either commodities or securities and decides which agency should regulate them (CFTC for commodities and SEC for securities). Lummis stated the need for a regulatory framework around digital assets to promote innovation while limiting bad actors.
As of December 2022, the bill is being debated in the Senate.
Future of crypto policy
After the collapse of the FTX cryptocurrency exchange in November 2022, Lummis again called for greater federal regulation around cryptocurrencies. She continued to push the Responsible Financial Innovation Act bill she introduced a few months prior, which would ban the commingling of customer assets with an exchange’s investments - the issue that caused FTX’s losses. She also called on Congress to become better educated on digital assets.
Controversy
Lummis has faced controversy for her work on shaping policy around cryptocurrency while owning a significant investment in bitcoin. In 2022, she announced that she put her digital assets into a blind trust, where an independent trustee controls the assets, in response to the criticism.
Cynthia Lummis essentials
- Cynthia Lummis is a US Republican Senator from Wyoming referred to as Washington’s crypto queen for her advocacy on behalf of cryptocurrencies.
- She has been influential in shaping proposed financial policy for digital assets, including sponsoring a major crypto bill and founding a financial caucus.
- Lummis has argued for better regulation around digital assets that still allows for innovation.