The Crypto Industry’s Appeal to Congress
The cryptocurrency sector recently seized the opportunity to make a compelling case for legislative intervention during a hearing before the House of Representatives subcommittee dedicated to digital assets. The subcommittee, led by Republicans, held the hearing under the title “A Golden Age of Digital Assets,” reflecting the industry’s renewed optimism and momentum.
Industry representatives arrived at the hearing buoyed by support from various quarters of the federal government, including the White House. Notably, the administration’s crypto czar was the first to mention the phrase “golden age.” Just over two years after witnessing the tumultuous collapse of major crypto lenders and the notorious downfall of FTX in 2022, the sector has demonstrated a remarkable recovery, with a growing number of lawmakers in favor of the regulatory framework that the industry has long sought.
“Under the Trump administration, we will course correct by creating a workable pathway for responsible digital asset companies to set up operations here in the United States,” declared Representative Bryan Steil, a Republican from Wisconsin who chairs the subcommittee, which is a branch of the House Financial Services Committee.
Republicans on the panel criticized the “unpredictable and hostile approach” toward cryptocurrencies during former President Joe Biden’s administration, as articulated by Steil. They noted that the executive branch is beginning to reverse some of the previous policies at the Federal Deposit Insurance Corporation (FDIC) and the Securities and Exchange Commission (SEC). However, the ultimate goal for the industry is to pass comprehensive legislation akin to the bill that secured approval in the House during the last session of Congress.
“There are many issues to debate over the next several years, but we need to move now and put that basic foundation in place,” stated Jonathan Jachym, a lawyer and global head of policy at U.S. exchange Kraken. His sentiment echoed the urgency felt by many in the industry.
Among the witnesses at the hearing was Timothy Massad, a former chairman of the Commodity Futures Trading Commission (CFTC), who was instrumental when the agency first recognized bitcoin (BTC) as a commodity. He advised lawmakers to avoid overly detailed provisions in their digital asset market-structure legislation, emphasizing that the CFTC and SEC possess the expertise needed to navigate the finer points of regulation. He urged that those agency leaders should be the ones to work through the intricate technical details.
This hearing marked the inaugural session for the digital assets panel in this new Congress. Nonetheless, several other committees in both chambers are already addressing crypto-related topics, including the issue of debanking. Earlier on the same day, Federal Reserve Chairman Jerome Powell acknowledged that debanking is a significant concern worth examining. He also confirmed that the Federal Reserve would not pursue a central bank digital currency during his tenure.
While Republicans and industry witnesses were vocal in their criticism of the Biden administration’s performance, Democrats took the opportunity to chastise former President Donald Trump for leveraging cryptocurrency for personal gain, particularly through his endorsement of the memecoin $TRUMP. They characterized this as a “crypto scam” that raises serious ethical concerns and may violate constitutional provisions that prohibit federal officials from profiting from their office.
