The U.S. House Financial Services Committee and House Agriculture Committee are set to work on a crypto bill that will oversee the crypto sector in the "next two months." This announcement was made by Rep. Patrick McHenry (R–N.C.), the chairman of the House Financial Services Committee, during CoinDesk's Consensus 2023 event. McHenry stated that the two committees will hold joint public hearings starting in May, after which they will put together the legislation.
The bill is expected to address both securities and commodities regimes, as well as issues that are hard to fix on either side. McHenry was optimistic about the chances of the bill being signed by President Joe Biden within the next 12 months. However, he also acknowledged the challenge of legislating something new into existence.
Sen. Cynthia Lummis (R-Wyo.), who was also a panellist during the session, expressed her enthusiasm for coordinating efforts with McHenry. She added that the House had a better chance of getting legislation through earlier than the Senate. Lummis emphasized that this is a bipartisan issue that needs to be addressed before the 2024 election, and that efforts have been made to keep partisan tinge off the subject.
The U.S. Congress has so far been unable to get comprehensive legislation on crypto passed, despite several bills making progress on Capitol Hill last year. Republicans on the House Financial Services Committee took a swing at finding bipartisan support for a second effort at stablecoin legislation this month, though bipartisan support remains uncertain. Republicans introduced a discussion draft, which may mark a new starting point for negotiations with Democrats.
Last year, Lummis had introduced the bipartisan “Responsible Financial Innovation Act” aimed at creating a regulatory framework for the industry with Sen. Kirsten Gillibrand (D-N.Y.). Lummis informed the Consensus crowd that a new-and-improved version of the bill would be unveiled in six to eight weeks, with a stronger section on national security and a more robust cybercrime aspect.
The recent role of crypto in the U.S. banking crisis, which has left the industry's banking relationships strained, is fair to call "Operation Choke Point 2.0," said McHenry. He added that Congress needs to fix this problem and provide certainty that crypto banking can be done in a safe and sound manner. "This is a great example of why Congress must legislate and provide clarity," he said.
The increasing pressure on lawmakers to legislate the industry comes after the meltdown of the FTX crypto exchange and the more recent collapse in crypto banking. Meanwhile, jurisdictions such as the European Union have approved the Markets in Crypto Assets (MiCA) law, making it the first major jurisdiction in the world to introduce a comprehensive crypto law. The EU’s agreement puts the bloc in the lead on Web3 technology, McHenry told CoinDesk earlier.
Lummis expressed concern that several jurisdictions are ahead of the US on crypto regulation, citing MiCA and other efforts. She stated that the US is falling behind and that these countries are telling the US to catch up. She also anticipates that the Howey Test will still be used in the most modern way expressed by US courts.
In conclusion, the upcoming joint public hearings by the House Financial Services Committee and House Agriculture Committee will be a crucial step towards legislating the crypto industry. The bill is expected to address both securities and commodities regimes, as well as issues that are hard to fix on either side. While the US has fallen behind other jurisdictions in crypto regulation, the introduction of this bill could help the country catch up and provide clarity to the industry.
