Sen. Cynthia Lummis — dubbed the Senate’s “crypto queen” — warns that the industry needs to accept the emerging political reality.
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House Financial Services Chair Patrick McHenry (R-N.C.) and other Republican leaders guiding the effort, like digital assets subcommittee Chair French Hill (R-Ark.), have spent weeks working with Democrats in a bid to advance legislation that would have a viable shot of becoming law.
“The collapse of FTX last fall has given both Republicans and Democrats an impetus to be looking for the kinds of proper statutory solutions that would prevent something like that happening in the future,” Hill said in an interview. “That’s what’s driving a consensus to try to develop a regulatory framework.”
Republicans have been helped along the way by industry leaders like Coinbase CEO Brian Armstrong, who met with moderate House Democrats, among others, on the bills Wednesday. The Blockchain Association has also “been doing a lot of meetings with [House] Democratic offices,” the group’s CEO, Kristin Smith, said.
“We will accommodate every concern people have with these two bills,” McHenry said. “That’s our goal.”
A few rank-and-file Democrats have signaled their support but it’s unclear how many will vote for the bills.
Federal Reserve officials have warned lawmakers about the way the stablecoin bill allows for states to continue to play a role in policing the tokens, according to House Democrats, with Fed Chair Jerome Powell testifying that “allowing a lot of private money creation at the state level would be a mistake.” There is also concern about tying the hands of the SEC, which has been one of the most active federal regulators targeting crypto fraud.
Then, there’s the Senate.
One of the chamber’s lead decision-makers on crypto policy, Senate Banking Chair Sherrod Brown (D-Ohio), has made clear over the years that he sees little, if any, value in digital currency and instead believes there are major risks to consumers.
He said the House GOP plan “is fairly simplistic and doesn’t really bring into the regulatory umbrella who it should.”
“It’s, not surprisingly, pretty inadequate,” he said.