Category: Hearings

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Reps. Torres And Flood Highlight SEC Oversight Hearing With Chair Gensler

SEC Chair Gensler at House Financial Services hearing

Republicans didn’t waste any time questioning the moves and motives of Securities and Exchange Commission (SEC) Chair Gary Gensler at the House Financial Services (HFS) “SEC Oversight” hearing today.

Video is here.

Minutes before the hearing commenced, a full-throated rejection by the Committee’s Republican caucus “slamming the agency for its persistent failure to conduct thorough economic analysis or consider stakeholder feedback regarding its regulatory agenda” was announced in the form of a letter to Chair Gensler. Read the release -and the letter.

Yesterday’s letter on Bitcoin spot market ETF’s sent by HFS committee member Rep. Mike Flood may have been more impressive given its bipartisan nature – both Rep. Ritchie Torres (D, NY) and Rep. Wiley Nickel (D, NC) signed on.

two things

As it turned out, during the hearing, the most revelatory moment related to digital assets was arguably provided by a Democrat (Rep. Torres (D, NY) – see below), Tokenization is a tripwire when it comes to securities laws for Chair Gensler.

And, another highlight was Rep. Mike Flood’s (R, NE) questioning of Chair Gensler about Staff Accounting Bulletin 121 (SAB 121) and, separately, Flood’s announcement about the new “Uniform Treatment of Custodial Assets Act” which would gut the SEC’s bulletin. See below.

Also: This was an uninterrupted 4.5 hour hearing that ended at 2:29 p.m. ET. Wow. April’s House SEC Oversight hearing was only 3 hours and 45 minutes. Continue reading “Reps. Torres And Flood Highlight SEC Oversight Hearing With Chair Gensler”

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House Financial Services CBDC Markup Sends Emmer Bill To House Floor

CBDCs and the House Financial Services Committee

An ambitious markup of thirteen bills was on the docket for today’s markup by House Financial Services Committee led by Chair Patrick McHenry (R, NC) and Ranking Member Maxine Waters (D, CA).

The markup’s themes – led by the Republican majority but coordinated with Democrats – included protecting consumer privacy and preventing the overreach of government. There was also bipartisan legislation protecting United States’ national security interests particularly as it related to China.

Overall, most of the hearing’s tone was one of cooperation across the aisle and was reflected in unanimous passage of every bill not related to Central Bank Digital Currencies (CBDCs).

So, perhaps due to the expectation of extended debate, blockchain-related legislation containing various restrictions on a Central Bank Digital Currency (CBDC) were last on the Committee’s agenda.

With several CBDC bills to pursue, the Republican majority, led by Chair McHenry, apparently decided to solely pursue passage of H.R. 5403, the “CBDC Anti-Surveillance State Act” by Majority Whip Rep. Tom Emmer (R, MN). The bill bans the issuance of a CBDC (but the Fed can study it, as Republicans later emphasized).

See the post-hearing press release from the GOP.

tl;dr – the voting

The voting for H.R. 5403, the “CBDC Anti-Surveillance State Act” was approved along party lines with a vote of 27-20 which sends the bill to the House floor.

Ranking Member Waters and Rep. Stephen Lynch’s (D, MA) attempts to add amendments “softening” Rep. Emmer’s bill were both rejected along party lines in a votes of 27-20, as well.

Rep. Emmer announced the bills’ passage immediately after the hearing. Read it.

the CBDC markup

As the Central Bank Digital Currency (CBDC) portion of the markup arrived, it was clear that Democratic leadership wanted any digital currency associated with the U.S. Dollar in the hands of the Federal government.  The mostly-unspoken implications for private stablecoins was that Democratic leadership was opposed.

After Chair McHenry’s opening statement (read it), Ranking Member Waters made her statement which criticized the Republican anti-CBDC view.

Waters said, “Nobody fully understands the potential benefits and challenges of CBDCs or how their implementation could affect the preeminence of the US dollar and global finance more broadly. That is why the Biden administration and the Federal Reserve are researching this. However, the Republican bill before us today would stifle that research and prevent us from moving forward, even if it means that the dollar loses its status as the world’s reserve currency. And even if it means that US citizens lose out on faster, cheaper and simpler payments. I’m disappointed that Republicans have taken such a deeply anti-innovation stance.”

The “anti-innovation” accusation is an about-face to Democratic leadership’s positioning against the recent stablecoin and digital asset market structure bills which could be considered “pro-innovation.” Continue reading “House Financial Services CBDC Markup Sends Emmer Bill To House Floor”

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House Agriculture Committee Markup: What If There Was A Roll Call Vote?

Roll Call Vote in House Agriculture

With the voice vote of the House Agriculture markup last Thursday, at first glance,  it’s hard to quickly identify which Members were “for ” or “against” the digital asset market structure bill known as “Financial Innovation and Technology for the 21st Century Act.”

Chair Glenn “GT” Thompson’s (R, PA) decision – no doubt in consultation with Ranking Member David Scott (D, SC) – to use the voice vote was likely driven by the Republican’s clear majority which would lead to unquestioned passage.

But, unlike House Financial Services, where roll call votes were requested by the Republican majority, the need to maintain comity among members could have been paramount for the House Ag Committee.  The Committee’s remit includes the critical Farm Bill and now has expanded to the complex, and potentially divisive, digital assets market structure framework.

Therefore, “Let’s not stir the pot more than necessary.”

breaking it down

But, what is there was a roll call vote? Let’s stir the pot.

There are 29 Republicans and 25 Democrats on the House Agriculture Committee. Continue reading “House Agriculture Committee Markup: What If There Was A Roll Call Vote?”

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Six Democrats Break From Party Leaders On HFS Digital Asset Bill

Markup Day 1

Nearly eight hours after Day 1 of the House Financial Services markup hearing commenced, it ended with approval of the signature bill of the day – the digital assets market structure bill a.k.a. H.R. 4763, the “Financial Innovation and Technology for the 21st Century Act.”

The final vote was … 35-15 in favor of the digital assets market structure bill as amended.

The vote was along party lines except for six (6) Democrats who broke with their party’s leadership: Rep. Ritchie Torres (D, NY), Rep. Wiley Nickel (D, NC), Rep. Josh Gottheimer (D, NJ), Rep. Steven Horsford (D, NV), Brittany Pettersen (D, CO), and, in particular, Rep. Jim Himes, (D, CT), who seemed exasperated with his party’s positioning.

Keep in mind, tomorrow’s House Agriculture Committee markup will also vote on the same digital assets market structure bill.

Read below for coverage of the day’s House Financial Services markup pertaining to the “Financial Innovation and Technology for the 21st Century Act.”

opening remarks

At the top of the markup hearing, House Financial Services (HFS) Chair Patrick McHenry (R, NC) outlined that any debate of the bills being marked up today would be completed before a final vote on all of the day’s bills by the Committee.

See all the bills on the HFS hearing page. And, see the video recording.

Clearly, the digital assets market structure bill was the featured bill today – the “Financial Innovation and Technology for the 21st Century Act.”

At a high level, the bill aligns certain crypto regulatory oversight with the Commodity Futures and Trading Commission (CFTC) versus the Securities and Exchange Commission (SEC). Continue reading “Six Democrats Break From Party Leaders On HFS Digital Asset Bill”

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Powell Says Stablecoins Are Money As McHenry Announces Markup For Digital Assets Legislation

Fed Chair Powell

Jerome Powell, the Republican Federal Reserve Chair appointed during the Trump administration, appeared before the House Financial Services (HFS) Committee today for his semi-annual hearing, “The Federal Reserve’s Semi-Annual Monetary Policy Report” a.k.a. the Humphrey-Hawkins report.

Although Powell’s prepared testimony was bereft of anything digital asset-related as was the Committee’s agenda for the hearing (see it), Chair Powell’s Q&A with members of Congress provided a taste of hot button digital asset issues for the Fed.

HFS Chair Rep. Patrick McHenry (R, NC) kicked things off right before Powell’s testimony saying before the full Committee that the stablecoin and market structure bills were on the HFS schedule for next month. Chair McHenry stated in the third person:

“The Chair would further announce to committee members that the Chair’s intention is that in the second week we return in July, we will have a markup, and that markup will include two important bills. One is giving digital assets a market structure and federal regulatory remit. And the second is a federal stablecoin regime. It is the intention of the Chair to have that as two pieces of committee markup in the second week when we return in July.”

More precisely, Digital Chamber’s Cody Carbone tweeted the tentative date for markup of both bills is July 19. (See: what is markup?)

After McHenry’s brief announcement, the hearing commenced.

Click below or scroll down for a selection of what Powell said about digital assets in answer to several Members of Congress during the Q&A portion of the hearing. Video is here.

(lightly edited for clarity)

Rep. Waters (D, CA): I’ve argued that we should allow states to be part of this process, but we must have a strong enforceable federal floor with the roll by the Federal Reserve to approve and provide oversight of payment stablecoins issued by non-banks in order to ensure that consumers are protected. Such a framework is similar to our dual-banking system and it would ensure that non-banks and banks are treated the same. We should also bear in mind that payments stablecoins are a new form of currency intended to allow individuals to pay for things with them. As such, do you agree that it is important for the Fed as our central bank to have a chance to approve or decline any state license non-bank entity before it starts issuing payments stablecoins nation-wide? Continue reading “Powell Says Stablecoins Are Money As McHenry Announces Markup For Digital Assets Legislation”

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Secretary Yellen Discusses Digital Assets At House Financial Services Hearing

Secretary Janet Yellen

Highlights from today’s U.S. Treasury Secretary Yellen‘s appearance in front of the House Financial Services Committee for the hearing, “The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System.”

Digital assets were discussed during the Q&A with Secretary Yellen by several Members of Congress. Video is here.

Click below or scroll down for a selection of what was said:

(lightly edited for clarity)

REP. HILL (R, AR): The FSOC (The Financial Stability Oversight Council) report  recommended that Congress passed legislation to provide regulators authority over stock markets for digital assets as well as legislation we could regulators more authority to have visibility into or supervise digital asset companies. We’re working on that here in Congress. Are those recommendations from late summer’s FSOC report (see the report) still the recommendations of FSOC… still the view of FSOC? Continue reading “Secretary Yellen Discusses Digital Assets At House Financial Services Hearing”

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‘Token Millennial’ Rep. Kat Cammack Explores Gaming, Government Programs And The Blockchain

Rep. Kat Cammack

As she began her 5-minute allotment of the Q&A, Rep. Kat Cammack (R, FL) let loose with a “quote of the day” as she identified herself “the token millennial” at the blockchain hearing run by House Energy and Commerce’s Subcommittee on Innovation, Data, and Commerce titled, “Building Blockchains: Exploring Web3 and Other Applications for Distributed Ledger Technologies.

Tokenized, indeed.

In spite of being the last Member to question the hearing’s witnesses, Cammack seemed to relish the chance to explore several areas in which she believed distributed ledger technology and digital assets could have compelling purposes.  See the video of Rep. Cammack’s Q&A.

(lightly edited for clarity)

REP. KAT CAMMACK: How do you envision blockchain changing the future of gaming and even going so far as, say, the metaverse?

RYAN WYATT, POLYGON LABS: I appreciate the question and am empathetic to it, especially having kids and my wife not being particularly keen with video games. But, I think one thing that a lot of folks don’t realize is the way that we think about video games – Mario, Tetris – it is evolved. They are digital worlds. People are learning. They’re interacting. They’re socializing. They’re wanting to spend their time inside of these environments, whatever it is that they’re doing, right? And there’s obviously a variety of things.

So, with this, is people want to spend money where they’re spending time – that’s a very natural behavior for anyone to do. Whether you’re a kid or an adult that are interacting in these digital worlds, that’s important. So therefore, you see a lot of digital goods being purchased inside of these games. Whether it’s a cosmetic item for you to have some representation in-game or whatever the case may be. As you pointed out, it’s generating hundreds of billions of dollars. YouTube’s one of the largest verticals in the (gaming) business. Continue reading “‘Token Millennial’ Rep. Kat Cammack Explores Gaming, Government Programs And The Blockchain”

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Lawmakers Want Use Cases, Witnesses Want Regulation: Today’s House Energy and Commerce Subcommittee Hearing

Rep. Darren Soto

Today’s hearing of House Energy and Commerce’s Subcommittee on Innovation, Data, and Commerce titled, “Building Blockchains: Exploring Web3 and Other Applications for Distributed Ledger Technologies,” was a rare opportunity for lawmakers to discuss blockchain applications beyond the financial realm – and learn.

And though some Democrats appeared to read from a script written by Democratic party leadership – such as the Subcommittee Ranking Member Rep. Jan Schakowsky (D, IL) and Rep. Lori Trahan (D, MA) who seemed to try and paint blockchain technology as a threat – other Members from both sides of the aisle often asked substantive questions.

This included Rep. Darren Soto (D, FL), who took his turn during the hearing’s Q&A section with a straightforward query about blockchain use cases.

Soto is well-known on Capitol Hill for his support of the burgeoning blockchain industry with his work on several blockchain-related bills including co-sponsorship of Majority Whip Rep. Tom Emmer’s (R, MN) recent “Securities Clarity Act“. He was also a co-chair of the Congressional Blockchain Caucus in the 117th Congress.

As evidenced by the answers to Rep. Soto ‘s question, witnesses mostly wanted to talk about the need for regulation, not use cases.  (Video is here.)

(Lightly edited for clarity)

REP. DARREN SOTO: In the beginning, in my opening remarks, I talked about a lot of the areas where we were already able to pass amendments into both the National Defense Authorization Act and the Appropriations Act and get a lot of the blockchain advances under federal law. It was mentioned by our colleague, [Rep. Rick Allen (R, GA)]: the food tracing with the FDA to help with public safety; helping with encrypted communications through our military; protecting veterans records, among other areas, going forward.

So, we in Congress want to make sure we’re good partners in advancing this critical technology, whether it’s for economic reasons, security, for advancing critical resources. So, I’ll start with Mr. Wyatt, but I’m going to ask all of you the same question. Mr. Wyatt, if there could be one particular partnership the federal government could help advance in some of these areas. What do you think it should be that we should work on and why? Continue reading “Lawmakers Want Use Cases, Witnesses Want Regulation: Today’s House Energy and Commerce Subcommittee Hearing”