Statements by Republican lawmakers ahead of the inaugural hearing of the US House subcommittee focused on digital assets, fintech and inclusion suggest partisan divisions over crypto regulation.
In a March 6 memo, Republicans on the House Financial Services Committee saying The first hearing of the Subcommittee on Digital Assets, Financial Technology and Inclusion will focus on the Biden administration's "attack on the digital asset ecosystem." The hearing is scheduled for March 9 as one of the first since Rep. Patrick McHenry became committee chairman at the start of the 118th Congress.
โOver the past two years, the Biden Administration has issued statements and proposed regulations that have inappropriately impacted the digital asset ecosystem,โ the memo reads. โMany of these actions can be considered an excess of judicial authority. Furthermore, the consequences of these policies cannot be underestimated. Due to the actions taken by this Administration, the United States risks boosting the ecosystem of digital assets abroad.
Representatives of the crypto industry, including BitGo co-founder and CEO Mike Belshe and Coinbase legal director Paul Grewal, are expected to testify at the hearing. Additionally, the subcommittee has listed 5 cryptocurrency-related bills that are under review, including McHenry's Keep Innovation in America Act.
5/1 Tomorrow I will be speaking on Capitol Hill about the need for a viable crypto regulatory framework. We must fix our financial system, reap the benefits of cryptocurrency, and protect consumers. Read a summary of my full message here: https://t.co/FUuachco32
โ paulgrewal.eth (@iampaulgrewal) March 8, 2023
"Regulators can state that digital assets are regulated in the same way as other assets and therefore apply the same rules, or regulators can say they are different and create new rules." saying Belshe in his prepared testimony. โBut what regulators cannot be allowed to do is claim that the assets are different and also claim that the rules are already understood.โ
added:
โI want to point out that this is not solely the fault of the current administration's targeting approach. We filed our letter with the SEC in 2018, under the supervision of the previous administration. The difficulty of keeping up with innovation is constant.โ
In September 2022, the White House launched a comprehensive framework for digital assets with six major directions for crypto regulation in the US following research by federal agencies. Tonya Evans, a professor at Penn State Dickinson Law who is also expected to appear as a witness at the hearing, said in prepared remarks that this framework "has not yet delivered on her promise":
โThe framework proposed by the Administration [served] more as a report of the agency's initial findings and recommendations than as a workable framework that regulated parties could reasonably rely on to legally operate within clear rules of engagement for this new dynamic and programmable asset class."
Related: US Lawmakers Plan to Reintroduce Bill Aimed at Fixing Crypto Reporting Requirements: Report
The subcommittee hearing falls exactly one year after US President Joe Biden signed an executive order with the aim of establishing a regulatory framework for digital assets. The order has caused federal departments to move forward with studying the potential impact of cryptocurrencies on the US financial system and, in some cases, develop policy recommendations.
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