The House Financial Services Committee and the Agriculture panel will meet in May to work on crypto legislation.
The U.S. House Financial Services Committee and House Agriculture Committee will put together legislation to oversee the crypto sector after holding joint public hearings starting in May, said Rep. Patrick McHenry (R–NC), chair of the House Financial Services Committee.
The legislation will be put together in the “next two months”, and may be signed by President Joe Biden in the next 12 months, according to McHenry.
“What we plan to do over the next two months is report a deal out,” McHenry said. He added that the bill will address both securities and commodities regimes.
Sen. Cynthia Lummis (R-WO), another panellist during the session, said she is looking forward to coordinating efforts with McHenry, adding that the House of Representatives had a better chance than the Senate at getting the legislation through earlier. According to Lummis, if the House moves first in crypto, it would “improve our chances” in the Senate.
“We have tried to keep partisan tinge off this subject,” Lummis said. “This is a bipartisan subject we need to address before the 2024 election.”
Lummis, known as the Senate’s “Crypto Queen,” introduced the bipartisan “Responsible Financial Innovation Act” last year in efforts to create a regulatory framework for the crypto sector, alongside Sen. Kirsten Gillibrand (D-NY).
The US Congress has been unable to pass comprehensive legislation on crypto, despite having a number of bills make progress on Capitol Hill last year.
Over April, Republicans on the House Financial Services Committee tried to find bipartisan support for their planned stablecoin legislation, but progress on that remains uncertain. During the month, Republicans have introduced a discussion draft that may mark a new starting point for negotiations with Democrats.
Lummis had announced that a new and improved version of the bill will be unveiled in six to eight weeks. “We are probably going to have a stronger section on national security. You will see a stronger cybercrime aspect to our bill,” Lummis said.
Last Thursday, a bipartisan bill calling for the federal government to study terrorist use cases for crypto was introduced in both the Senate and House of Representatives. Meanwhile, McHenry’s committee have been calling out on US Securities and Exchange Commission (SEC) Chair Gary Gensler over his refusal to call Ether, the second-largest cryptocurrency by market cap, a security.
Congress needs to provide sufficient guidance there,” said Lummis. “I anticipate we will still be using the Howey Test” in the most modern way expressed by U.S. courts.
As Congress’s progress on crypto laws have been plateauing, lawmakers have been facing the pressure to regulate the industry with haste, after the collapses of FTX and crypto banking.
McHenry notes that crypto’s recent role in the US banking crisis, which has left the crypto sector’s banking relationships strained, is a problem that needs to be addressed.
“We have to fix this problem, we have to provide certainty that you can bank in a safe and sound manner,” he said. “This is a great example of why Congress must legislate and provide clarity.”
Crypto legislation beyond the US has been progressing – with the European Union’s approval of the Markets in Crypto Assets (MiCA) law being the first major jurisdiction in the world to introduce a comprehensive crypto law. Meanwhile, regulators in Japan, United Arab Emirates, the UK, and Hong Kong are moving towards regulating and revisiting how they monitor the crypto industry.
“Several jurisdictions are ahead of us,” Lummis said, mentioning MiCA and other efforts. “We are falling way behind. These countries are telling us to catch up.”