U.S. House Financial Services and Agriculture Committees plan to introduce crypto oversight legislation in the next two months after holding joint hearings starting in May.
Rep. Patrick McHenry and Sen. Cynthia Lummis plan to address both securities and commodities regimes, as well as issues that are hard to fix on either side.
Pressure on Congress to legislate the industry has increased after the meltdown of the FTX crypto exchange and the recent collapse in crypto banking, while other jurisdictions have already taken steps to regulate the space.
As the use of cryptocurrencies continues to grow and impact the financial industry, lawmakers and regulators have been facing increasing pressure to legislate the industry. In the United States, the House Financial Services Committee and House Agriculture Committee are planning to develop legislation to oversee the crypto sector in the next two months. The committees plan to hold joint public hearings in May to address issues that are hard to fix on either the securities or commodities side, including how to provide certainty for safe and sound banking relationships.
In my estimation, the reason so many young Americans are into #Bitcoin is because it is #soundmoney. The federal govt’s blank check spending habit, coupled with the complete erosion of the gold standard and the development of the internet, led us here. Inevitable.— Cynthia Lummis 🦬 (@CynthiaMLummis) April 25, 2023
Representative Patrick McHenry, chairman of the House Financial Services Committee, announced the joint effort during the Consensus 2023 event, where he emphasized the need to create clear rules of the road for the digital asset ecosystem while striking the appropriate balance to protect consumers without stifling responsible innovation. McHenry also stressed that the committees’ bipartisan efforts aim to create a regulatory framework for the crypto industry before the 2024 election.
Meanwhile, other jurisdictions, such as the European Union, have approved comprehensive crypto laws, pushing the U.S. to catch up. The EU’s Markets in Crypto Assets (MiCA) law makes it the first major jurisdiction in the world to introduce a comprehensive crypto law, putting the bloc in the lead on Web3 technology, according to McHenry.
In addition to the EU, other regulators in Japan and the United Arab Emirates have also moved toward regulating the space, while Hong Kong and the UK are revisiting how they approach crypto. Senator Cynthia Lummis, the other panelist during the session, noted that these countries are ahead of the U.S. and pushing them to catch up.
Although the U.S. Congress has been unable to get comprehensive legislation on crypto passed, the committees’ bipartisan efforts aim to create a regulatory framework for the crypto industry before the 2024 election. The legislators are hoping that the House moves first on crypto, which would “improve our chances” in the Senate, according to Lummis. She also noted that a new-and-improved version of the bipartisan Responsible Financial Innovation Act will be unveiled in six to eight weeks, with a stronger cybercrime aspect to address concerns around digital assets.
In conclusion, the joint effort between the House Financial Services Committee and House Agriculture Committee is a step towards providing regulatory clarity to the crypto sector. The goal is to create a regulatory framework for the industry that protects consumers while encouraging responsible innovation. With other jurisdictions already approving comprehensive crypto laws, the U.S. is being pushed to catch up and establish clear rules of the road for the digital asset ecosystem.