U.S. House Will Have Crypto Bill in 2 Months: McHenry

The U.S. House Financial Services Committee and House Agriculture Committee are set to work on legislation for the oversight of the crypto sector. The bill is expected to address securities and commodities regimes and other issues that are hard to fix on either side. The two committees will hold joint public hearings starting in May to prepare for the legislation, which will be reported out in the next two months, according to Rep. Patrick McHenry, chair of the House Financial Services Committee. 

In a session at CoinDesk’s Consensus 2023 event, McHenry said that the legislation could be signed by President Joe Biden within the next 12 months. However, he also acknowledged that it is always a challenge to legislate something new into existence. McHenry hopes that the House will move first on crypto legislation to improve the chances of getting the bill through the Senate. 

Sen. Cynthia Lummis, dubbed the Senate’s “Crypto Queen,” said that she looked forward to coordinating efforts with McHenry. She added that the House has a better chance than the Senate at passing legislation on crypto earlier. She emphasized that the subject should be bipartisan and that it needs to be addressed before the 2024 election. 

The U.S. Congress has been unable to pass comprehensive legislation on crypto despite several bills making progress on Capitol Hill last year. However, Republicans on the House Financial Services Committee recently introduced a discussion draft for a second effort at stablecoin legislation, aimed at finding bipartisan support. Last year, Lummis introduced the bipartisan “Responsible Financial Innovation Act” with Sen. Kirsten Gillibrand (D-N.Y.). She said that a new-and-improved version of the bill will be unveiled in six to eight weeks. 

In addition, a bipartisan bill was recently introduced in both the U.S. Senate and House of Representatives calling for the federal government to study crypto use cases for illegal activity, including how terrorists or other criminals might use cryptocurrencies. 

During a recent hearing, McHenry’s committee grilled U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler over his refusal to say whether ether (ETH) was a security. Lummis said that Congress needs to provide sufficient guidance in this regard, and she anticipates that the Howey Test will still be used in the most modern way expressed by U.S. courts. 

Lawmakers have been facing increasing pressure to legislate the industry after the meltdown of the FTX crypto exchange and the more recent collapse in crypto banking. McHenry said that crypto’s recent role in the U.S. banking crisis, which has left the industry’s banking relationships strained, is fair to call “Operation Choke Point 2.0.” He emphasized the need for Congress to legislate and provide clarity to the industry. 

Meanwhile, the European Union has approved the Markets in Crypto Assets (MiCA) law, making it the first major jurisdiction in the world to introduce a comprehensive crypto law. 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. 

In summary, the U.S. House Financial Services Committee and House Agriculture Committee are set to work on legislation for the oversight of the crypto sector, which President Joe Biden could sign within the next 12 months. The bill will address securities and commodities regimes and other issues that are hard to fix on either side. Lawmakers have been facing increasing pressure to legislate the industry after recent collapses in the crypto sector. However, the subject remains bipartisan, and efforts are underway to find bipartisan support for the legislation.

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