House Financial Services Chair McHenry Announces Retirement; What’s Next

McHenry exits

Shortly after the news was leaked, House Financial Services Chair Patrick McHenry (R, NC) announced on X that the jig was up: “I will be retiring from Congress at the end of my current term. I believe there is a season for everything and—for me – this season has come to an end. I look forward to what comes next for my family and me.”

In a press release, McHenry expressed confidence that his departure after 20 years, Congress was in “good hands” with the Members who remain and are to come: “I truly feel this institution is on the verge of the next great turn. Whether it’s 1974, 1994, or 2010, we’ve seen the House evolve over time. Evolutions are often lumpy and disjointed, but at each stage, new leaders emerge. There are many smart and capable members who remain, and others are on their way. I’m confident the House is in good hands.” Read the statement.

McHenry exits – reaction

Politico’s Eleanor Mueller reported on X that fellow HFS Committee member Rep. Jim Himes (D, CT), who supported both the stablecoin and digital asset market structure bills during the HFS markup, was “devastated” by McHenry’s decision: “He’s one of the real voices of sanity around here. This institution is gonna be a lot weaker for his absence.”

Proving that McHenry impact reached across TradFi and decentralized finance advocates, the American Bankers Association tweeted in appreciation of Chair McHenry and “for his years of dedicated service to the people of North Carolina and his ongoing efforts in the House [Financial Services Committee] to ensure our banking system remains the envy of the world. ABA looks forward to working with you as you serve out your term.” And, Crypto Council of Innovation CEO Sheila Warren said on X that Chair McHenry’s “consistent approach to coalition building, willingness to work in a bipartisan nature, and constructive engagement with industry. He will be deeply missed when he leaves Congress.”

According to Punchbowl News’ Brendan Pedersen, former Speaker Kevin McCarthy (R, CA) said that “McHenry’s done a ‘tremendous’ job… ‘When Rep. [Steve Scalise (R, LA)] was shot, doing the whip job — I don’t think there’s a better whip than Patrick. I think he would have been a great speaker…”

DeFi Education Fund said in a statement on X, “Chairman McHenry’s level-headed, bipartisan leadership and receptiveness to the idea that novel technologies require fit-for-purpose regulations has been (and will continue to be over the next year) a great service, and we wish him all the best in his future endeavors.”

Coinbase CEO Brian Armstrong chimed in on X to McHenry’s tweet saying, “Thank you for your service to the country!”

more tips:

Reps. Blaine Luetkemeyer (R, MO), Bill Huizenga (R, MI) and French Hill (R, AR) are among those rumored to take over the Republican leadership role in HFS in the next Congress. Of course, it’s anyone’s guess which party will be in the majority and take the Chair in 2025.

McHenry exits – legacy

Chair McHenry is not done yet in the House of Representatives, of course.

And whether he stayed as a Member of Congress or not, McHenry always had just a year remaining as HFS Chair due to term limits. Now, with a November 2024 general election inevitably distracting his House Financial Services (HFS) Committee and colleagues, stablecoin legislation would seem to be an attainable “icing on the cake” for his House Financial Services legacy. Increasingly, as central bank digital currencies (CBDCs like the Digital Yuan) and stablecoins appear beyond U.S. borders, the Biden Administration appears to know that it’s time for stablecoin law, too.

In the House, McHenry, HFS digital asset supporters on both sides of the aisle and House Agriculture led by Chair Glenn “GT” Thompson (R, PA) have given the U.S. a chance to solidify the Country – and the U.S. Dollar – as the undisputed leader of the free world for decades to come as technology and the decentralization which it enables coalesces with centralized, democratic government.

But, law still awaits.

Meanwhile, McHenry’s success in the private sector appears assured. It does not seem far-fetched that – depending on timing and his interests – McHenry could return to government as a Senator someday, in a Cabinet role in a Republican Administration or even within a Democratic Administration seeking his bipartisan, statesman skills in a time of crisis (as exhibited during last March’s banking crisis). His HFS partner, Ranking Member Maxine Waters (D, CA), would likely concur. (Perhaps Waters relents on strong, pre-emptive Federal rights in stablecoin legislation as a final goodbye?)

more tips:

On McHenry: House Majority Whip Tom Emmer (R, MN) [statement] and HFS Vice Chair French Hill (R, AR) [statement]

Chair Thompson

Thompson Statement on Cancer Diagnosis – House Agriculture Chair Glenn “GT” Thompson (R, PA) on X

blockchain bills

Yesterday in a 46-0 vote, “H.R. ___, Deploying American Blockchains Act” from Reps. Larry Bucshon (R, IN) and Lisa Blunt Rochester (D, DE), passed out of the Energy & Commerce Committee markup. The bill encourages the Secretary of Commerce to “promote the leadership of the United States with respect to the use of blockchain technology.” An E&C hearing in September was the bill’s precursor.

The ambitious E&C markup includes review of 44 bills and will continue today with a vote on another blockchain bill: “H.R. 4814, Consumer Safety Technology Act” from Reps. Darren Soto (D, FL), Michael Burgess (R, TX), Lori Trahan (D,  MA), and Brett Guthrie (R, KY). This bill directs the Consumer Product Safety Commission to “establish a pilot program to explore the use of artificial intelligence in support of the mission of the Commission and to direct the Secretary of Commerce and the Federal Trade Commission to study and report on the use of blockchain technology and digital tokens, respectively.”

The Committee resumes at 10 a.m. ET today.

more tips:

Full Committee Markup of 44 Pieces of Legislation (Video) – House Energy & Commerce Committee

stablecoin news

Fresh Money Flows to Crypto as Stablecoin Market Expands After 1.5 Years Downtrend – CoinDesk

Crypto payments: PayPal’s stablecoin ripple effect on markets – Cointelegraph

Coinbase Wallet lets users send stablecoins for free on messaging apps like WhatsApp and iMessage – Fortune

socializing regulation

At the Financial Times Crypto Winter Summit in London yesterday, New York Department of Financial Services (NYDFS) Superintendent Adrienne Harris said during a panel discussion that there was an “element of anonymity” in crypto which was serving the interests of illicit. According to Decrypt’s Stephen Graves, Harris said that NYDFS is “socializing” crypto firms to regulation and pointed out “that existing financial services companies like banks, insurance companies or mortgage lenders are ‘used to having regulators and know what that interaction is supposed to be like.'” Read more.

new HFS hearing

Next week, Tuesday, December 12 at 2 p.m., HFS Capital Markets Subcommittee will convene for a hearing titled: “Examining the Agenda of Regulators, SROs, and Standards-Setters for Accounting, Auditing.” See hearing page.
what you should know: The theme of this Capital Markets Subcommittee hearing echoes yesterday’s HFS Digital Assets, Financial Technology and Inclusion Subcommittee hearing – how are regulators approaching innovation?

quote of the day

“While Republicans claim to be advancing legislation to promote innovation in this space, the irony is that they’re actively working to the budgets for all the agencies responsible for oversight of this so-called innovation, including the CFPB, SEC, and CFTC.” – Rep. Ritchie Torres (D, NY) on X

still more tips

Buying frenzy puts some Grayscale crypto funds at ‘absurd’ premiums – Financial Times

Crypto likes the government now, sort of – Politico

Video and prepared testimony from yesterday’s House Financial Services Digital Assets, Financial Technology and Inclusion hearing – financialservices.house.gov

HFS Digital Assets Subcommittee Chair French Hill (R, AR) Delivers Remarks at Hearing to Examine How Agencies Can Leverage Technology to Shape the Future of Financial Services (statement) – financialservices.house.gov