Markups – today and tomorrow
Between the House Financial Services (HFS) Committee and the House Agriculture Committee, there are now three (3) markups scheduled which include digital assets legislation crafted by the committees – one markup is today, two are tomorrow.
Markup #1 – Today’s HFS markup led by Chair Patrick McHenry (R, NC) entails six (6) bills including the digital asset market structure bill known as “H.R. 4763 – Financial Innovation and Technology for the 21st Century Act.”
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- Today’s HFS landing page with the bills and live stream are here. Starts at 10 a.m. ET.
- Among the other bills to watch today is a bipartisan effort introduced by Majority Whip Rep. Tom Emmer’s (R, MN) “H.R.1747 – Blockchain Regulatory Certainty Act” co-sponsored by Rep. Darren Soto (D, FL).
Markup #2 – Tomorrow’s HFS markup entails seven (7) bills including the stablecoin bill known as “H.R. 4766 – Clarity for Payment Stablecoins Act of 2023.”
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- Tomorrow’s HFS landing page with the bills and live stream are here. Starts at 9 a.m. ET.
Markup #3 – Also tomorrow, the House Agriculture Committee led by Chair Glenn “GT” Thompson (R, PA) will convene their own markup of “H.R. 4763 – Financial Innovation and Technology for the 21st Century Act.”
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- Tomorrow’s House Ag landing page with the bill and live stream are here. Starts at 10 a.m. ET.
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another new bill
Politico’s Eleanor Mueller reports that on Thursday the HFS Committee will consider a new bill from Rep. Warren Davidson (R, OH) “that would prevent regulators from placing certain restrictions on self-custody of digital assets. Similar language was included in the most recent version of the stablecoin text, but likely a nonstarter for friendly Democrats.” Read more.
Known as the “Keep Your Coins Act,” the yet-to-be-numbered House bill is here (PDF).
stablecoin bill negotiation
It’s coming down to the wire for the HFS stablecoin bill where Republicans and Democrats continue their negotiation. This seems like a hopeful sign for bipartisan support.
Punchbowl’s Brendan Petersen says Federal Reserve oversight is being pushed by HFS Ranking Member Maxine Waters (D, CA) and explains, “Waters’ pitch for the Federal Reserve’s oversight has quiet support from the U.S. banking lobby, according to three unpublished letters obtained by Punchbowl News.” Running amid this change is Federal Reserve oversight of stablecoin applications by state-level non-banks says Petersen. Read more.
Markups – HFS voting
Though the Republican majority are expected to unanimously support House Financial Services (HFS) Chair McHenry and pass the digital assets legislation being considered, the votes by Democrats may provide some drama. Pro-crypto hopes are that any significant Dem support could signal a changing bicameral “tide” that might seep into the Senate’s Democratic members – an unexpected outcome in the 118th Congress.
No doubt HFS Ranking Member Maxine Waters (D, CA) will reflect the collective mind of Democratic leadership in Washington.
Whether other rank-and-file Democrats follow the Ranking Member’s lead remains to be seen. Among HFS Democratic members who have voiced support of digital assets-related legislation and its concerns in the past include: Rep. Ritchie Torres (D, NY), Rep. Josh Gottheimer (D, NJ), Rep. Wiley Nickel (D, NC), Rep. Bill Foster (D, IL) and Jim Himes (D, CT).
Markups – Soto
“The Blockchain Regulatory Certainty Act” introduced by Majority Whip Emmer and co-sponsored by Rep. Darren Soto (D, FL) will also be another “tell” on how Democrats are coalescing around digital assets legislation.
The bill was originally introduced in 2018 and aims “at ring-fencing blockchain developers and service providers such that they are not required to have money transmitter licenses since they do not custody customer funds.” Read more from blockchain tipsheet.
HFS Republicans will undoubtedly vote in favor and back their leader. Will Democrats on the HFS Committee follow Soto’s lead?
This a bill similar to the 2021 Jobs Act change some have sought with bipartisan support in the Senate in 2021 and 2022 (1, 2, 3).
Soto is not on the HFS Committee (he’s on Agriculture and Energy and Commerce), but has been an active proponent of blockchain-related legislation for years including participation in the Congressional Blockchain Caucus which went dormant at the conclusion of the 117th Congress.
Rep. Soto is responsible for the Digital Taxonomy Act and Token Taxonomy Acts along with Rep. Warren Davidson (R, OH). Read more from Soto’s appearance at a DC event in June 2022.
Dems: House Ag vs HFS
Another way to examine these votes and pro- or anti-crypto momentum in Congress will be between House Ag and House Financial Services (HFS) on the digital asset market structure bill.
Once again, full support of both committees’ chairs is expected by Republicans.
But, Democratic support might differ such that House Ag Dems led by Ranking Member David Scott (D, GA) are supportive of the market structure bill that gives the Commodity Future Trading Commission (CFTC) – which is overseen by House Ag – a significant say on crypto regulation going forward.
HFS Democrats led by Ranking Member Waters, who is aligned with Democratic leadership and, arguably, the Securities and Exchange Commission (SEC), have wondered aloud if the market structure legislation is even needed.
Rep. Waters formally asked SEC Chair Gary Gensler and U.S. Treasury Secretary Janet Yellen to weigh in on the digital assets market structure bill in late June. The Biden Administration appointees’ responses are unknown.
amendments
Separately, the House Agriculture Committee released yesterday a summary of amendments in the nature of a substitute (ANS) suggested by Members for the digital assets market structure bill across HFS and House Ag. See the amendments (PDF). They include:
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- “Provides the CFTC with $120 million in funding over five years for the implementation, administration, and enforcement of the new requirements, fully funding the CFTC initial request.”
- “Further revises the oversight process for digital asset intermediaries during period before full registration is available.”
- “Clarifies the limits of the Commissions’ authority over permitted payment stablecoins.”
- “Fine tunes the statutory requirements for entities registered with the Commissions as digital asset intermediaries.”
- “Makes numerous technical and conforming changes to better execute the sponsors’ intent.”
Digital Chamber of Commerce policy executive Taylor Barr noted on X (formerly Twitter) about the new market structure bill and the often-raised concern by Democrats: does the CFTC have the funding for digital assets oversight? Barr tweeted, “FYI these changes include $120mil for the CFTC over 5 yrs…this directly addresses concerns of an unfunded mandate.”
House Vote
Coming out of the markups this week, the Republican majority in both committees are expected to send the digital assets legislation to the House Floor for a vote in September or October given the close involvement of Majority Leader Emmer. In other words, digital assets is a key part of the House Republican agenda.
But, when that vote happens, more drama likely ensues. And not just with Democrats, but within the Republican caucus where factions and still more agendas can make votes highly unpredictable.
Digital Asset Chairs’ op-ed
Aiming to ramp up support for its digital assets market structure bill, the two Chairs for House Digital Assets Subcommittees in House Agriculture and Financial Services, respectively, made their case in The Hill.
Rep. Dusty Johnson (R, SD) and Rep. French Hill (R, AR) try to rope in the Democrats and write in part, “This legislation is also a direct response to the Financial Stability Oversight Council’s own recommendation for legislation to create a digital asset regulatory framework, which both Treasury Secretary Janet Yellen and Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam testified in favor of before our committees.” Read more in The Hill.
H.Res 604
ICYMI. Though more ceremony than substance, H.R. 604 introduced on July 20 is still notable for its bipartisan support. It begins…
“Expressing support for blockchain technology and digital assets.”
“July 20, 2023 – [Reps. Dusty Johnson, French Hill, Ritchie Torres (D, NY) and Wiley Nickel (D, NC)] submitted the following resolution; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Financial Services, and Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned…”
see more tips
Bank objections over state provision could complicate stablecoin bill – The Block
Rep. Mike Flood (R, NE) highlights support, importance of Stablecoin State Pathway – WJAG
How Bitcoin Miners Can Stay Clear of SEC Scrutiny (and Fall Foul of It) – CoinDesk
Some Binance.US Crypto Trading Was a Mirage, the SEC Alleges – The Wall Street Journal
He Went to Prison for Crypto Crime. Now He’s an Advocate for Compliance – The Wall Street Journal
CFTC Charges Tennessee Husband and Wife Realtors for Operating a $6 Million Digital Assets Commodity Pool Scheme – CFTC.gov