Lummis Pushes Responsible Financial Innovation Act to Clarify US Crypto Rules, Let Banks Stake and Custody Assets
Sen. Cynthia Lummis is pushing the Responsible Financial Innovation Act (RFIA) as Senate committees schedule markups in mid-January to clarify U.S. digital-asset rules. The RFIA and the related Digital Asset Market Clarity Act aim to draw a clearer line between securities and commodities, establish a unified regulatory framework, and add consumer protections. Key provisions would permit U.S. banks to custody crypto, offer institutional-grade settlement, and stake assets to earn yield — measures intended to keep more crypto capital onshore and expand bank-led services. The Senate Banking Committee plans manager’s amendment consideration and member amendment deadlines in early January, while the Agriculture Committee advances related language on CFTC authority over crypto commodities. Republican leaders are fast-tracking the timetable, but Democratic support is uncertain; negotiators including Senators Cory Booker and Ruben Gallego have raised concerns, and at least seven Democratic votes may be needed for final passage. Lawmakers remain in closed-door talks to resolve issues such as DeFi safeguards and limits on official profits. For traders: passage could materially increase institutional custody demand, onshore staking flows, and regulatory clarity — factors that may support higher institutional adoption and liquidity; however, timing, contested provisions, and possible changes in draft language mean outcomes remain uncertain.
Bullish
The RFIA’s core provisions — clearer securities-versus-commodity definitions, explicit bank custody, and permission for banks to stake crypto — reduce regulatory uncertainty and lower operational barriers for institutional participants. That tends to be bullish for the underlying cryptocurrencies referenced (notably major store-of-value and staking-capable assets) because passage would likely increase onshore custody flows, institutional demand, and staking activity, improving liquidity and reducing custody risk premia. Short-term volatility is still likely around committee markups, amendment fights, and political negotiation; contested provisions or dilution of bank-staking permissions could temper upside. In the longer term, a stable, bank-integrated custody/staking framework would likely support higher institutional adoption and a sustained positive price impact for the affected assets.