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Democrats Split Again As Stablecoin Bill Passes House Financial Services

stablecoin bill

With the first day of House Financial Services (HFS) Committee markups in the books, Day 2’s roster of bills for markup featured H.R. 4766, the “Clarity for Payment Stablecoins Act of 2023.”

And with Chair Patrick McHenry (R, NC) and Ranking Member Maxine Waters (D, CA) negotiating the night before over federal versus state jurisdiction according to Rep. Ritchie Torres (D, NY), an HFS member, there was some question as to whether the stablecoin bill would be ready for today’s hearing or would have to be postponed until the Fall.

See hearing page with video stream.

But after a marathon, 12-hour hearing that included rancorous debate and a parliamentarian’s delight of rules and rulings, the stablecoin bill passed by a tally of 34-16 with five Democrats splitting from Democratic leadership and joining all of the Committee’s Republicans.

Democrats voting for the bill included:  Rep. Gregory Meeks (NY), Rep. Jim Himes (CT), Rep. Josh Gottheimer (NJ), Rep. Ritchie Torres (NY) and Rep. Wiley Nickel (NC).

Himes, Gottheimer, Torres and Nickel also voted to pass yesterday’s market structure bill, too.

opening remarks

From the start, the markup for the stablecoin bill was a steady stream of lawmaker fireworks.

Chair McHenry began by explaining his frustration that even though the new bipartisan version of the stablecoin bill was nearly ready, the White House was not helping move the negotiation to the next step.

After completing his opening remarks, he passed the baton to Ranking Member Waters who asked for a quorum which was a way to use Congressional rules and shutdown the hearing given the lack of attendance by Committee members at the time.

Republicans scrambled and delivered the quorum. Continue reading “Democrats Split Again As Stablecoin Bill Passes House Financial Services”

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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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Historic Digital Assets Markup Hearings Begin Today

markups for digital assets legislation

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.”

    • 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.”

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.”

Continue reading “Historic Digital Assets Markup Hearings Begin Today”

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House Agriculture Schedules Thursday Markup; AML, KYC Meet Crypto Concerns In DC

AML KYC

market structure markup

The House Agriculture Committee confirmed late yesterday that this week’s House Ag markup led by Chair Glenn “GT” Thompson (R, PA) for the digital assets market structure bill – a.k.a. H.R. 4763, “The Financial Innovation and Technology for the 21st Century Act” – is scheduled for Thursday at 10 a.m.

See the hearing’s landing page. Live stream will be here, too.

This is the day after Chair Patrick McHenry (R, NC) will lead House Financial Services Committee and its markup hearing on the market structure bill as well as six others.

With Majority leader Rep. Tom Emmer (R, MN) joining the bill, the hope is that a House vote will be possible in the September-October time frame.

AML-KYC clouds

Even with first-ever, digital assets legislation reaching the markup stage in the House Financial Services and Agriculture Committtees, there are plenty of clouds gathering for crypto in Congress observes Politico’s Eleanor Mueller.

She sees the recent Lummis-Gillibrand and Warren-Marshall partnership over a National Defense Authorization Act (NDAA) amendment as a sign of wider misgivings in Congress – the Senate, in particular – that center around enforcement of anti-money laundering (AML) and know-your customer (KYC) requirements for crypto. The new CANSEE legislation supported by a bipartisan group of Senators including its lead sponsor, Sen. Jack Reed (D, RI), strikes similar AML/KYC “notes.” Continue reading “House Agriculture Schedules Thursday Markup; AML, KYC Meet Crypto Concerns In DC”

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Crucial Hearing For Digital Assets And Congress This Wednesday

HFS markup details released

Late Friday, the House Financial Services (HFS) Committee led by Chair Patrick McHenry (R, NC) issued a press release announcing its markup of seven different bills which will commence this Wednesday, July 26 at 10 a.m. at 10:00 a.m. at the Rayburn House Office Building.

See the hearing page. And, view the Memorandum (PDF).

The seven are (links go to Congress.gov):

    1. H.R. 4763, the Financial Innovation and Technology for the 21st Century Act (Thompson/Hill/Johnson)
    2. H.R. 4766, the Clarity for Payment Stablecoins Act of 2023 (McHenry)
    3. H.R. 1747, the Blockchain Regulatory Certainty Act (Emmer)
    4. H.R. 3244, the Stop Fentanyl Money Laundering Act of 2023 (Luetkemeyer)
    5. H.R. 4768, the No Russian Agriculture Act (Waters)
    6. H.R. 4765, the Exposing China’s Support for the Taliban Act (Lynch)
    7. H.R. 2969, the Financial Technology Protection Act of 2023 (Nunn)

Notable among them is the very latest version of the stablecoin bill: H.R. 4766, “The Clarity for Payment Stablecoins Act of 2023”. See the text (PDF).

From the Memorandum on the stablecoin bill: “H.R. 4766 provides a clear regulatory framework for the issuance of payment stablecoins that are
designed to be used as a means of payment. The framework mitigates potential risks posed by payment stablecoins, while at the same time fostering innovation by establishing a tailored approach for new entrants into the marketplace.” Continue reading “Crucial Hearing For Digital Assets And Congress This Wednesday”

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Financial Innovation and Technology for the 21st Century Act Introduced; FedNow Goes Live

House Agriculture

new bill for digital assets

In a tantalizing tweet for the crypto throngs at 3:16 pm. ET on Twitter yesterday, the Republican House Agriculture Committee account said, “👀Some big #crypto news coming soon…”

[drum roll, please]

About an hour later, House Agriculture Chair GT Thompson (R, PA) delivered the news that the new market structure bill for digital assets – which include some changes from the discussion draft according to sources – has a new name, “H.R. 4763, the Financial Innovation and Technology for the 21st Century Act.” Sources also confirm it will be heading to a markup next week.

From the release: “Today, Glenn “GT” Thompson (R, PA), Chairman of the House Committee on Agriculture, and French Hill (R, AR), Chairman of the Subcommittee on Digital Assets, Financial Technology and Inclusion, and Dusty Johnson (R, SD), Chairman of the Subcommittee on Commodity Markets, Digital Assets, and Rural Development, introduced H.R. 4763, the Financial Innovation and Technology for the 21st Century Act. Additional cosponsors include Reps. Tom Emmer (R, MN) and Warren Davidson (R, OH).”

Chair Thompson is quoted in the release: “Today’s introduction of the Financial Innovation and Technology for the 21st Century Act marks a significant milestone in the House Committees on Agriculture and Financial Services efforts to establish a much-needed regulatory framework that protects consumers and investors and fosters American leadership in the digital asset space.” Read more. Continue reading “Financial Innovation and Technology for the 21st Century Act Introduced; FedNow Goes Live”

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Bipartisan DeFi Bill Introduced By Senator Reed; Crypto Amendment Bill Update

DeFi

new DeFi bill

A new bipartisan bill introduced on Tuesday is focused on decentralized finance (DeFi) and its combination with Anti-Money-Laundering (AML) and Know Your Customer (KYC) requirements – and concerns. There is nothing related to innovation in this bill.

Called the “Crypto-Asset National Security Enhancement Act of 2023” and introduced by Senate Banking Sen. Jack Reed (D, RI) with Senators Mark Warner (D, VA), Mike Rounds (R, SD) and Mitt Romney (R, UT) as co-sponsors.

The bill is known as “S.2355” on Congress.gov or “A bill to clarify the applicability of sanctions and antimoney laundering compliance obligations to United States persons in the decentralized finance technology sector and virtual currency kiosk operators, and for other purposes.” Visit Congress.gov.

CoinDesk reports that the bill places “requirements on ‘anyone who “controls” a DeFi protocol or makes available an application to use the protocol,’ likely a reference to groups who build user-friendly frontends for protocols’ otherwise cumbersome smart contracts, as Uniswap Labs does for Ethereum’s top decentralized exchange.”

Read all about it.

new DeFi bill – ‘purport’

According to the Congressional Record, Sen. Reed said in introducing the bill, “Decentralized finance or ‘DeFi’ refers to cryptocurrency protocols and applications that purport to allow automated peer-to-peer transactions using blockchain technology. DeFi enables users to transact and trade cryptocurrency without requiring a traditional financial institution to broker trades, clear and settle transactions, or custody assets.”

Reed added, “Criminal syndicates, fraudsters, ransomware hackers, and rogue states have been quick to recognize how DeFi can be exploited to advance their nefarious activities. By design, DeFi provides anonymity allowing malicious and criminal actors to evade traditional tools that the government uses to enforce the AML and sanctions laws.” Read more.

The industry association, DeFi Education Fund, didn’t hesitate in offering its ‘take’ on the new bill. From its Twitter account, the Fund said in a thread, “While we are supportive of effective measures to combat the illicit use of DeFi, the bill introduced today essentially says ‘centralize, shut down, or get out of the United States.’ There are far better options that can not only help combat the illicit abuse of DeFi but also do so at a much lower cost to crypto users’ rights and to technological innovation in the United States.”

Digital Chamber of Commerce commented on the bill in a blog post. The industry organization is not impressed: “The Chamber views it as an excessive and misguided approach to addressing security issues related to decentralized finance (DeFi) and Crypto Kiosks.” Read more – including Digital Chamber policy executive Cody Carbone explaining why its a “bad bill.”

more tips:

Regarding “crypto-asset,” do we really need the hyphen?
Continue reading “Bipartisan DeFi Bill Introduced By Senator Reed; Crypto Amendment Bill Update”