Congressman Patrick McHenry (R-NC), the chairman of the House Financial Services Committee, sent a letter on May 9 to House Appropriations Committee Chairwoman Kay Granger (TX-12) and Ranking Member Rosa DeLauro (CT-03) outlining his committee's priorities. In the letter, McHenry said that a top priority is ensuring that innovation can thrive in the U.S., and he believes that in order for that to happen, Congress needs to pass a comprehensive bill laying out regulations for digital assets.
“Digital assets, and their underlying blockchain technology, hold promise as the building blocks for the next generation of internet technology. But it’s the job of lawmakers — not unelected bureaucrats — to legislate a regulatory framework," McHenry said in his letter. "Moreover, it is critical that the Committee prevent the SEC from continuing its effort to regulate by enforcement. Establishing clear rules of the road ensures this innovation will remain in the United States."
Speaking at the Consensus 2023 event hosted by CoinDesk last month, McHenry said the House Financial Services Committee and House Agriculture Committee are working to put together legislation in the "next two months" following joint public hearings in May, CoinDesk reported. McHenry said he believes President Joe Biden could sign such a bill within the next year. He said the bill will cover securities and commodities, as well as areas that are difficult to cover on either side.
Sen. Cynthia Lummis (R-WY), who was also a panelist at the Consensus event, said she believes digital assets are a bipartisan issue that needs to be addressed before the next presidential election, CoinDesk reported. She said a new version of the bipartisan “Responsible Financial Innovation Act,” which she introduced last year alongside Sen. Kirsten Gillibrand (D-NY), should be ready by the end of June and will include more focus on national security and cybercrime.
Many crypto industry insiders have been calling on lawmakers to establish clear regulatory guidelines for crypto companies in the U.S., saying that failure to do so will result in innovators and entrepreneurs leaving the country for more crypto-friendly jurisdictions. Ambre Soubiran, the CEO of Paris-based Kaiko, a crypto market data provider, predicted that the U.S.'s regulation-by-enforcement approach is going to push the crypto industry to Hong Kong, which has been moving forward with a plan to become a global hub for crypto innovation, CoinTelegraph reported.
“The U.S. being more stringent these days than ever on crypto and Hong Kong regulating in a more favorable way ... is going to clearly shift the center of gravity of crypto assets trading and investments more towards Hong Kong," Soubiran said in an interview, according to CoinTelegraph.
The Biden administration presented an anti-crypto position in its annual Economic Report of the President released last month, which said that although crypto has many potential benefits, it is too volatile and has not achieved those benefits, Federal Newswire previously reported. "Some have hoped that crypto assets could act as a form of decentralized money, making the U.S. payment systems faster, cheaper, safe, and more inclusive. This vision has not been realized," the report said.
The Blockchain Association said in a statement in response to the report that the Biden administration is at risk of being remembered as a "roadblock to a global tech revolution" rather than a "leader of profound innovation." "While other countries are increasingly receptive to the burgeoning crypto industry, some in government appear increasingly allergic to its promise, sending companies and innovators offshore," Blockchain Association CEO Kristin Smith said.
