The RFIA is the most wide-ranging crypto bill yet.

Latham & Watkins presents a blog series on the Responsible Financial Innovation Act, which was introduced in the US Senate on June 10, 2022, to create a framework for digital assets, cryptocurrency, and blockchain technology. 

On June 10, 2022, US Senators Cynthia Lummis from the Senate Banking Committee and Kirsten Gillibrand from the Senate Agriculture Committee introduced legislation to create a framework for digital assets, cryptocurrency, and blockchain technology. The much-anticipated bipartisan bill, titled the Responsible Financial Innovation Act (RFIA), is the most ambitious digital asset bill yet put forward to Congress, and covers a broad range of topics. The legislation is designed to balance innovation and responsibility, and seeks to safely integrate digital assets into the existing regulatory fold through definitional and jurisdictional clarity.

The sponsors have called the legislation no less than “a complete regulatory framework for digital assets,” although it is by many estimates a work in progress that will benefit from public debate and input. The bill may be amended and improved over time as it takes a winding path through the Senate’s banking, agriculture, intelligence, and financial services committees before reaching the Senate floor, which may be unlikely to happen before the 2023 session of Congress.

This blog series will cover the RFIA from the following angles:


As a preliminary matter, the RFIA categorizes and defines digital assets as follows:

Digital asset: a natively electronic asset that confers economic, proprietary, or access rights or powers, is recorded using cryptographically secured distributed ledger technology or any similar analogue.

The definition of digital assets includes virtual currency and ancillary assets (consistent with the proposed changes to the Commodity Exchange Act) as well as payment stablecoins (as defined below):

  • Virtual currency: a digital asset that is used primarily as a medium of exchange, unit of account, store of value, or any combination of such functions; is not legal tender; and does not derive value from or is backed by an underlying financial asset (except other digital assets). Virtual currencies include digital assets accompanied by a statement from the issuer that a denominated or pegged value will be maintained and be available upon redemption from the issuer or other identified person, based solely on a smart contract (i.e., algorithmic stablecoins).
  • Ancillary asset: intangible and fungible digital assets that are sold “in connection with the purchase and sale of a security through a scheme that constitutes an investment contract.” Ancillary assets are not fully decentralized and may benefit from entrepreneurial and managerial efforts that determine the value of the assets. However, they do not represent debt or equity and do not create rights to profits, assets, or other financial interests in a business entity.

Payment stablecoins: a digital asset that is redeemable on a one-for-one basis with a currency defined as legal tender under US or foreign law, is accompanied by a statement from the issuer that the asset is redeemable as specified, is issued by a business entity, is backed by one or more financial assets (excluding digital assets), and is intended to be used as a medium of exchange.