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 cryptocurrency regulation.
In a March 6 memo, Republicans on the House Financial Services Committee claimed the first Digital Assets, Financial Technology and Inclusion Subcommittee hearing would focus on the administration’s “attack on the digital asset ecosystem.” Biden. The hearing is scheduled for March 9 as one of the first since Rep. Patrick McHenry took over as chairman of the committee at the start of the 118th Congress.
“Over the past two years, the Biden Administration has issued statements and proposed regulations that have unduly affected the digital asset ecosystem,” the note says. “Many 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 is at risk of pushing the ecosystem of digital assets abroad” .
Representatives of the cryptocurrency industry, including BitGo co-founder and CEO Mike Belshe and Coinbase Chief Legal Officer Paul Grewal, are expected to testify at the hearing. In addition, the subcommittee has listed 5 cryptocurrency-related bills under review, including McHenry’s Keep Innovation in America bill.
1/5 Tomorrow I will speak on Capitol Hill about the need for a workable crypto regulatory framework. We must fix our financial system, embrace the benefits of crypto, and protect consumers. Read a summary of my full message here: https://t.co/FUuachco32
— 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 that they are different, and create new rules,” Belshe said in his prepared testimony. “But what regulators cannot be allowed to do is claim that the assets are different, and also claim that the rules are already understood.”
added:
“I want to point out that this is not solely the fault of the current administration’s approach to the guidelines. We filed our letter to the SEC in 2018, under the watchful eye of the previous administration. The difficulty of keeping up with innovation is constant.”
In September 2022, the White House published a comprehensive framework for digital assets with six main guidelines for regulating cryptocurrencies in the US following investigation by federal agencies. Tonya Evans, a professor of law at Penn State Dickinson, 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”:
“Administration’s proposed framework 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 for this novel asset class, programmable and dynamic.
The subcommittee hearing comes exactly one year after US President Joe Biden signed an executive order aimed at 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, developing policy recommendations.
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