Meet The House Republican Who Could Decide Crypto’s Future

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While cryp­to prices ral­lied last week, the pub­lic learned House Repub­li­cans are form­ing a cryp­tocur­ren­cy sub­com­mit­tee. The announce­ment may spell the begin­ning of the end of U.S. reg­u­la­to­ry ambi­gu­i­ty on blockchain and dig­i­tal assets.

“Strange, isn’t it? Each man’s life touch­es so many oth­er lives. And when he isn’t around, he leaves an awful hole, doesn’t he?” — Clarence, “It’s A Won­der­ful Life” (1946 Christ­mas dra­ma about a bank­ing panic).

Addressing a Big Hole

Rep. Patrick McHen­ry, a Repub­li­can from North Carolina’s del­e­ga­tion, said Thurs­day he’s plan­ning to cre­ate the new cryp­to subcommittee.

He says it will address “a big hole in how we struc­ture the com­mit­tee” to reck­on with cryp­to. McHen­ry was refer­ring to the House Finan­cial Ser­vices Com­mit­tee, for which he is the incom­ing chair for the 118th U.S. Congress:

“We’ve got to respond for over­sight and pol­i­cy­mak­ing on a new asset class.”

The announce­ment of a new House cryp­to pan­el coin­cid­ed with a mas­sive cryp­to price bull run. Over $600 mil­lion in BTC shorts were liq­ui­dat­ed as the Bit­coin price ral­lied to $21,000. The over­all cryp­to mar­ket cap bal­looned to $1 tril­lion as alt­coins post­ed dou­ble-dig­it gains.

After a year-long roll to ever-low­er sup­port lev­els, the cryp­tocur­ren­cy exchange mar­ket has final­ly shown some spir­it. Maybe all it need­ed was a lit­tle broad-based con­sumer con­fi­dence and the hope of some reg­u­la­to­ry clarity.

After the fall of FTX in Novem­ber, the Repub­li­can McHen­ry joined with Demo­c­ra­t­ic Rep. Max­ine Waters (CA) to call for a bipar­ti­san cryp­to bill.

Fol­low­ing a series of dev­as­tat­ing insol­ven­cies among var­i­ous cryp­to star­tups, con­sumers and investors may wel­come con­gres­sion­al rule­mak­ing. It could also clear up the future of many projects by resolv­ing the turf war among U.S. regulators.

For exam­ple, the SEC has been push­ing for con­trol over the reg­u­la­tion of cryp­to. But the Com­mod­i­ty Futures Trad­ing Com­mis­sion says Bit­coin (BTC) and Ether (ETH) are commodities.

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Meet The House Republican Who Could Decide Crypto’s Future

A rule issued by leg­is­la­tion from the Repub­li­can Con­gress might not mean bur­dens for the cryp­to indus­try. It cer­tain­ly could, for instance, if Bit­coin were defined by law as secu­ri­ty. But it might not go that way.

A year ago, the Repub­li­can finan­cial ser­vices chair tweet­ed:

“Con­gress must ful­ly under­stand these inno­v­a­tive new tech­nolo­gies, like #cryp­to. We don’t need knee-jerk reac­tions by law­mak­ers to reg­u­late out of fear of the unknown.”

McHen­ry has also encour­aged pol­i­cy­mak­ers to ques­tion whether they are tak­ing cryp­tocur­ren­cy seri­ous­ly and under­stand it well enough to even make sen­si­ble propo­si­tions about it:

“Let’s be clear, this tech­nol­o­gy is already reg­u­lat­ed. The ques­tion for pol­i­cy­mak­ers is whether you know enough about this tech­nol­o­gy, which is nei­ther fish nor fowl, to have a seri­ous debate.”

One indi­ca­tion that new rules from the Repub­li­can-led cryp­to sub­com­mit­tee might not be oner­ous is McHenry’s posi­tion on pay­day loan reg­u­la­tions. He sup­port­ed a 2020 Trump-era Repub­li­can rule change to relax com­pli­ance bur­dens for pay­day lenders issu­ing high-inter­est loans.

His top con­trib­u­tors are Alpha­bet Inc, a tech titan; Sig­na­ture Bank, a New York com­mer­cial bank­ing giant; and MetLife, Inc., an insur­ance com­pa­ny. There is a lot of over­lap there with the con­cerns and eco­nom­ics of the cryp­to business.

What­ev­er hap­pens next, cryp­to and tra­di­tion­al finance mar­kets will be watch­ing and strate­giz­ing about their futures.

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