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Senator Cynthia Lummis’ Bill and What Does it Mean for Bitcoin

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Senator Cynthia Lummis (R-WY) unveiled a massive bill to legalize and regulate cryptocurrencies in the US. Its lead advisor on the initiative, MicroStrategy CEO Michael Saylor, believes that bitcoin is a commodity, not a security.

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The US Cryptocurrency Bill appears to have support among crypto industry insiders from both Bitcoin maximalists and the Ethereum/DeFi/Web 3.0 wing. And it has bipartisan support sponsored by Kirstin Gillibrand (D-NY) and Ted Cruz (D-Texas).

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What could be the reason why the US Cryptocurrency Bill classifies Bitcoin and other cryptocurrencies as commodities and not as securities?

Bitcoin will obviously be labeled as a commodity

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Because while promoting the bill ahead of its promulgation, Senator Lummis said that if passed into law, it would distinguish between commodities, securities, stablecoins, central bank digital currencies, and NFTs.

The fact that there will be a distinction at all between commodities and securities leaves bitcoin as the most important feature of the commodity.

Bitcoin is most similar to a commodity in its price fluctuations due to the demand for a scarce digital commodity with global correlation of macroeconomic prices with energy prices and inflation driven by computing rigs running BTC mining software that anyone can download.

Other cryptocurrencies are essentially the purchase of use/capital tokens that can function not only as a cash payment and banking system, but also as smart money with features such as incentives for voting rights in complex smart contract based blockchain governance that affects on their value, more like publicly traded securities in corporate entities.

But US Senator Lummis cryptographic account will treat most cryptocurrencies as commodities.

Sailor was the “first pair of eyes” on the bill

But the real strong indication that the bill classifies bitcoin as a commodity is that Senator Lummis’ lead advisor and “first look” was MicroStrategy CEO and crypto regulatory clarity advocate Michael Saylor.

Lummis said using Sailor:

“Michael Saylor was one of the first people to take notice because his background comes from years of experience and we want to make sure we have a lot of proposals before we submit it.”

And in a recent interview with Lex Friedman’s popular technology and science podcast on YouTube, MicroStrategy’s CEO was very adamant about differentiating bitcoin from stocks and even other cryptocurrencies as a commodity. He repeatedly insisted that bitcoin is not the same as a security and explained why.

A security is a personal interest in the equity or financial assets of an organization, such as shares. Bitcoin is not an owner’s stake in a specialized company that provides a particular commodity to the business for profit by the owners.

This is the ultimate settlement in a deflationary custodial currency on the most secure escrow network ever deployed and designed for this exact purpose.

Lobbying Congress for Cryptocurrency Bill

It’s not just bitcoin maximalists like Michael Saylor who are in talks with the government about a cryptocurrency bill. Miles Jennings, general advisor to cryptocurrency investor Ethereum Andresen Horowitz and head of decentralization, said cryptocurrency accounts:

“This is the starting point for discussions about what the law should be. I think that’s one of the reasons we’re excited about it.”

Thus, it appears that whale-sized leaders in both wings of the crypto industry have consulted with the legislators that drafted this bill.

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