House GOP plans crypto overhaul
Why it matters: It’s unclear what the committee will propose, but the effort comes as federal banking and market regulators step up enforcement of traditional financial regulations in the crypto space. Digital asset firms are urging Congress to create a specialized rulebook for crypto, as some jurisdictions such as the European Union have begun to do.
The recent action by US agencies will be the focus of a subcommittee hearing that Hill will chair on Thursday. It will feature testimony from Paul Grewal, general counsel for the US-based crypto exchange Coinbase.
“Europe, the United Kingdom, Australia and Singapore — just to name a few — are putting in place regulatory frameworks that create high standards for crypto,” Grewal said in prepared remarks. “It’s really a race to the top, and the US is already behind.”
Fed Chairman Jerome Powell, testifying on Capitol Hill this week, suggested it would be a good idea for Congress to weigh in. Hill pressed him on it Wednesday.
“I think it would be important for us to have a workable legal framework around digital activities,” Powell said Tuesday. “It’s important, and something Congress has to do in principle because we can’t really do it.”
Hill dropped some possible hints Wednesday about the GOP’s direction on a crypto regulatory plan.
During the hearing, he asked Powell if a US digital asset framework would help banks, brokers and custodians understand how to participate in the market safely. He also questioned whether it should preserve the role of state regulators in overseeing the industry.
Republicans are signaling crypto support: Thursday’s Digital Assets Subcommittee hearing will showcase a handful of Republican-led crypto bills that generally support the industry and its customers. The legislation could get a committee vote at a mark-up scheduled for March 28.
“I’m not sure we’ll tag them up there, but we’re talking about it,” Hill said. “We might have someone else introduced, so we might have some other priorities.”
The bills include proposals that would express congressional support for blockchain technology and digital assets, exempt blockchain developers from some reporting and licensing requirements and reduce tax reporting requirements for crypto firms.
The Senate: Leader of Agriculture in the Senate Debbie Stabenow (D-Mich.), who has launched her own crypto regulatory plan, said Wednesday that she has “had some conversations” with her colleagues in the House.
“There is certainly, I think, a general perception that this is an area that needs to be regulated, so [as] to protect consumers,” she said.
Asked if she expected lawmakers to reach an agreement, she said: “I’m actually optimistic. I think the hard part is the farm bill.”
