A pair of senators—one Republican, one Democrat—have introduced a bill that would regulate digital assets, blockchain technology, and cryptocurrencies in the United States for the first time.

The Responsible Financial Innovation Act, announced Tuesday by Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.), would “create a complete regulatory framework for digital assets that encourages responsible financial innovation, flexibility, transparency, and robust consumer protections while integrating digital assets into existing law,” according to a joint press release.

Under the provisions of the bill, which the two senators are already calling “Lummis-Gillibrand,” cryptocurrency like bitcoin and ether would be classified as commodities and be regulated by the Commodity Futures Trading Commission (CFTC). Such cryptocurrencies make up about half of the estimated $2 trillion market cap for digital assets, the senators said.

Stablecoins, which are digital assets whose values are pegged to a fiat currency like the dollar, euro, or some other tangible asset, would have to comply with strict rules regarding how those assets are held and how stablecoin owners could redeem the coins for their equivalent dollar/euro value. The bill also would create a framework to allow banks and other financial institutions to issue stablecoins but would not require all stablecoin issuers to be regulated like banks.

The CFTC has already issued enforcement actions in the stablecoin space, like the $41 million fine it levied against Tether in October 2021.

The New York State Department of Financial Services (NYDFS) announced its own regulatory guidance Wednesday for stablecoins issued by NYDFS-regulated entities that requires all such stablecoins to be backed by adequate reserves. NYDFS-regulated entities have been allowed to issue stablecoins since 2018.

Lummis-Gillibrand would require other digital asset offerings that are not commodities but, according to the bill, are not securities either, to make disclosures to the Securities and Exchange Commission (SEC) twice a year. The bill would also create a process by which a digital asset or coin can prove it has become decentralized—that is, its value is no longer dependent on the entrepreneurial or managerial skill of its creators, is not a debt or equity instrument, or no longer creates rights to profits or liquidation preferences—and can cease making disclosures to the SEC and be regulated as a commodity by the CFTC.

The bill would also impose disclosure requirements on digital asset service providers.

“The United States is the global financial leader, and to ensure the next generation of Americans enjoys greater opportunity, it is critical to integrate digital assets into existing law and to harness the efficiency and transparency of this asset class while addressing risk,” Lummis said in the press release.

Digital assets like cryptocurrency reside in a regulatory purgatory in the United States. There are no agreed-upon definitions of what the different kinds of digital assets are, which would allow firms, investors, and the market to understand what these investments are supposed to do; how they are supposed to act; and what returns and strategies, if any, resemble more traditional investments.

The result is controlled chaos. Some digital assets cannot legally be offered to U.S. citizens, and while the cryptocurrency industry has exploded in value since 2017, it is beset by wild valuation swings and bedeviled by brazen thefts and scams. Even worse, without proper regulation, U.S. customers with legitimate complaints have no outside authority to turn to, and scam victims are left with no recourse when their savings vanish.