On Tuesday, Patrick McHenry, Republican from North Carolina and Chairman of the United States House Financial Services Committee, made a very important announcement regarding crypto regulations, a much-talked topic amidst the US policy-making and executing institutions.
The United States House Financial Services Committee is the committee of the United States House of Representatives that oversees the entire financial services industry, including the securities, insurance, banking, and housing industries.
In the context of crypto regulations, McHenry said that Gary Gensler, Chairman of the Securities and Exchange Commission (SEC), would appear before the House’s digital assets subcommittee on April 18.
Sources reveal that McHenry established the digital assets subcommittee in January this year to bridge the structural gap in the House Financial Services Committee in addressing crypto topics.
Two Republican lawmakers are in charge of the subcommittee as Rep. French Hill leads alongside Rep. Warren Davidson as his deputy. At the beginning of the subcommittee, McHenry had said it would provide federal regulators with rules and extend the reach of financial technology to underserved demographics.
Speaking about Gensler’s appearance, McHenry said that the oversight hearing will seek clarity on Gensler’s rulemaking and approach to digital assets and this is the first hearing of it. Quoting him:
This will be our first oversight hearing of the Securities and Exchange Commission.
He added that this is a very sincere step from the agency in developing a regulatory environment for crypto assets. He also hopes that they could develop their work in the regulatory sphere in the next few months. He stated:
In terms of policy, [this will be] a serious approach in terms of us laying down…a regulatory sphere for digital assets.
Following the recent collapse of the Silicon Valley Bank in the US and the depegging of the USDC stablecoin that sent shockwaves through the industry, lawmakers in the US have been highly pressured for regulations. Maxine Waters, the highest-ranking Democrat from the House Financial Services Committee, said she and McHenry would fast-track a new stablecoin bill drafted last year.
Gensler’s appearance before the committee is going to have a very major role in the regulatory sphere of digital assets. Gensler and SEC have been constantly criticized for being anti-crypto and inhibiting innovation. The regulator’s approach has been called a regulation via enforcement approach which has received criticism from lawmakers, industry participants as well as lawmakers.
In the past months, the SEC has targeted several big-shot crypto firms like Kraken, Paxos, and even Coinbase. The SEC sent a Wells Notice to Paxos for selling unregistered security referring to the third largest stablecoin BUSD. Initially, the firm said it categorically disagreed with the regulator and BUSD is not a security under the US federal laws, however, later it confirmed having talks with the regulator.
Just last week, the SEC sent another Wells Notice to Coinbase accusing it of violating US federal laws. To this, the executives of the firm took to Twitter and called out the regulator for lack of clarity and criticized their approach. Brian Armstrong, the CEO of Coinbase also sent out a message to unite the larger crypto community and asked them to vote for crypto-friendly leaders.
The SEC’s enforcement-driven approach has also been criticized by its own commissioner, Hester Pierce. She requested the lawmakers to immediately interfere with the process of crypto regulations to ensure efficiency. Similarly, French Hill, at DC Blockchain Summit, said that the regulator’s approach would be responsible for driving fintech companies away and that would not be good for the country.
