Republicans in the U.S. House of Representatives intend to strengthen their oversight of the crypto market by forming a new subcommittee.
According to a new Politico report, North Carolina Representative Patrick McHenry, chair of the House Financial Services Committee, said he planned to create the subcommittee in part to fill a "big hole" in the committee's current structure.
"We've got to respond for oversight and policymaking on a new asset class," McHenry reportedly said.
The new panel, which will be led by French Hill of Arkansas and Warren Davidson of Ohio, will discuss issues pertaining to digital assets, financial technology, and financial inclusion.
McHenry, who has placed crypto regulation at the top of his legislative agenda, stated that the group will be responsible for crafting policies that support financial technology to reach underserved communities and giving clear norms among federal regulators.
One of the first actions taken by House Republicans in the 118th Congress since gaining control of the chamber on Jan. 3 was the anticipated legislative decision.
Because Republicans were unable to elect a House Speaker, lawmakers were unable to adopt rules, decide committee assignments, or advance legislation for four days during the new session. California Representative Kevin McCarthy was able to take the gavel after 15 rounds of voting.
The House Financial Services Committee is set to hold another hearing under McHenry to investigate the collapse of bitcoin exchange FTX. The committee had its first hearing on the issue in December, with McHenry stating at the time that lawmakers will meet again to discuss FTX in 2023.
The establishment of the digital asset group demonstrates how cryptocurrency has come to dominate the financial regulatory agenda in Congress. In the past, the Financial Services Committee was primarily concerned with the oversight of banks, Wall Street corporations, and their regulators.
In recent years, the digital asset business has grown as a lobbying force as companies attempted to create the basis for a friendlier regulatory environment, gaining allies on both sides of the aisle. After a steep drop in recent months and the implosion of the once-dominant FTX, which spurred fraud charges against the exchange's top executives, crypto businesses are now playing defense.
The new subcommittee will hold hearings and play a key role in bill development.
