As readers of this newsletter should know all too well, the U.S. is lagging when it comes to crypto regulation. Brazil recently advanced a governmental decree to establish its central bank as the primary regulator, the European Union formally signed its Markets in Crypto Assets regulation into law, and even Hong Kong is pressuring banks to accept crypto exchanges as clients.
Thanks to the toxic fallout of FTX, the U.S. has dragged its feet after appearing set to advance several bipartisan efforts at the end of last year. After Republicans took control of the House Financial Services Committee, tasked with securities regulation and oversight of the Securities and Exchange Commission, Democrats in the body expressed surprising reluctance on even low-hanging fruit like stablecoin regulation.
Patrick McHenry (R-N.C.), the chair of the committee, seems set on his mission to at least push legislation out of the House, even if it dies in the Senate. In early June, he partnered with Republicans from the House Agriculture Committee—which oversees the CFTC—to produce a long-awaited market structure bill, and released a new draft of stablecoin legislation that incorporated Democratic positions the following week. Despite the progress, McHenry’s minor wins have been mostly drowned out by the aggressive crackdown from the SEC.
Yesterday, at a House Financial Services hearing with Federal Reserve Chair Jerome Powell, McHenry took the opportunity to seize back the narrative. At the onset of the session, McHenry announced without fanfare his intention to advance both the market structure and stablecoin bills in the second week of July through a “mark-up,” or a legislative process where committee members can offer amendments to a bill before voting the bill out of the committee for consideration in front of the full House.
For an industry starved of good news, reports of McHenry’s update drew applause, with embattled Binance founder Changpeng Zhao even tweeting an article from The Block with a clapping emoji. Any legislation still faces steep odds—even if a bill makes it out of the Republican-controlled House, it will be hard to gain approval from hardline crypto skeptics in the Senate, including Sherrod Brown (D-Ohio) and Elizabeth Warren (D-Mass.) For the Sisyphean morass that is the U.S. Congress, sometimes the attempt is what counts.
The hearing saw one more bright spot for crypto advocates. In his testimony, Powell described payment stablecoins as a form of money, called for strong central bank oversight, and admitted that cryptocurrencies have “staying power” as an asset class. Ever agreeable, Bitcoin surged past $30,000.
Leo Schwartz
leo.schwartz@fortune.com
@leomschwartz
