As announced by Rep. Patrick McHenry (R–N.C.), Chair of the House Financial Services Committee, the U.S. House Financial Services and Agriculture Committees are committed to composing legislation that would monitor the cryptocurrency industry within the next two months. This follows a series of public hearings commencing in May 2021.
McHenry stated that within the upcoming two months, they plan to present a bill encompassing both securities and commodities regulations as well as emerging challenges that cannot be settled independently.
In the session, Sen. Cynthia Lummis (R-Wyo.) shared her thoughts on coordinating with Rep. McHenry in advancing crypto legislation. She noted that the House had a better chance of pushing through regulations faster than the Senate and that starting in the House would improve their odds.
Congresswoman Lummis stated that Congress should strive for a non-partisan approach in tackling the various issues regarding digital currencies. She opened that comprehensive legislation should ideally be implemented before the 2024 election. Despite numerous proposed bills making progress previously, Congress has yet to pass any meaningful legislation on this topic.
Committee members from both sides of the aisle in the House Financial Services Committee have joined forces to work on introducing stablecoin legislation. A discussion draft constitutes a fresh start for negotiations, though it is uncertain whether bipartisan support can be achieved. Republicans are taking the lead in offering a framework for the new proposal.
Representative Liz Cheney spoke at Consensus and shared that a modified version of the bill will be available in six to eight weeks. She noted that it will include tougher elements on national security, cybercrime, and other related topics. Lummis expressed her confidence in the efficacy of the revised bill.
On Thursday, a bipartisan bill was introduced in the U.S. Senate and House of Representatives calling for federal government research into how criminals may use cryptocurrencies for illegal activities. The legislation seeks to analyze potential crypto use cases for terrorist financing and other unlawful conduct.
Last week, the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler underwent questioning by McHenry’s committee regarding his stance on whether ether (ETH), the second-largest cryptocurrency by market cap, was a security or not.
Congresswoman Lummis stated that additional guidance is needed from Congress, and added that the Howey Test, which has been adopted by U.S. courts, would likely remain applicable in the modern context.
As tensions remain high between Republicans and Democrats in Congress, there is a growing demand for governments to take action regarding the cryptocurrency industry. The FTX crypto exchange meltdown and the latest issues with crypto banking have further complicated matters. It is imperative that political leaders come together on this issue soon to create policies that protect consumers and uphold the integrity of the crypto market.
Tracy McHenry has noted that the crypto industry’s current involvement with the U.S. banking crisis can be considered “Operation Choke Point 2.0.” This crisis has strained relationships between bankers and businesses in the crypto field.
He emphasized the need to address this issue and ensure secure banking practices. “We must be certain that our financial systems remain secure. The importance of legislative clarity in this context cannot be underestimated,” he said. “This circumstance is an excellent illustration of why Congress should create new laws that can provide direction in these matters.”
The European Union recently introduced the Markets in Crypto Assets (MiCA) law, making it a major global leader in Web3 technology. This major advancement puts the EU ahead of the curve when it comes to crypto regulations. CoinDesk spoke with McHenry earlier who detailed this development as well as its impact on the industry.
Regulatory clarity is a global priority. This is evidenced by MiCA, efforts in Japan, the United Arab Emirates, Hong Kong, and the UK. In light of this, Representative Lummis notes that the US is “falling way behind” its international counterparts when it comes to regulatory clarity for crypto assets.
