Rep. Patrick McHenry (R-N.C.), chair of the U.S. House Financial Services Committee, has revealed plans to develop legislation to regulate the cryptocurrency sector within the next two months. McHenry announced the timeline during CoinDesk's Consensus 2023 event, where he stated that the bill would be created in collaboration with the House Agriculture Committee after joint public hearings begin in May.
Despite the challenges of legislating a new concept, McHenry expressed confidence that the bill could be signed into law by President Joe Biden within the next 12 months. The legislation aims to address securities and commodities issues that have proven difficult to resolve in the past.
During the same panel discussion, Sen. Cynthia Lummis (R-Wyo.) expressed support for McHenry's initiative, stating that the House has a better chance of passing legislation ahead of the Senate. Lummis believes that if the House moves first on crypto regulation, it could improve the Senate's chances of following suit. The senator emphasized the need for bipartisan cooperation on the issue before the 2024 election.
Previous attempts to pass comprehensive cryptocurrency legislation in Congress have been unsuccessful. However, this month, Republicans on the House Financial Services Committee sought bipartisan support for a second effort at stablecoin legislation. A discussion draft introduced by Republicans may serve as a new starting point for negotiations with Democrats.
Lummis, known as the Senate's "Crypto Queen," introduced the bipartisan "Responsible Financial Innovation Act" last year alongside Sen. Kirsten Gillibrand (D-N.Y.). A revised version of the bill, featuring stronger sections on national security and cybercrime, is expected to be unveiled in six to eight weeks.
In light of recent crypto-related crises, including the FTX exchange meltdown and the collapse of crypto banking, lawmakers are under increasing pressure to regulate the industry. McHenry referred to the current state of the industry as "Operation Choke Point 2.0" and emphasized the need for legislative clarity to ensure safe banking practices.
As the U.S. works toward developing comprehensive crypto regulation, other jurisdictions such as the European Union have already approved legislation like the Markets in Crypto Assets (MiCA) law. This places the EU at the forefront of Web3 technology, with McHenry acknowledging that several jurisdictions are ahead of the U.S. Lummis urged the U.S. to catch up with other countries, such as Japan and the United Arab Emirates, that have already taken steps to regulate the crypto space.
