According to the report, the cryptocurrency market is on track to see record lobbying expenditures as Bitcoin keeps rising. However, Congress is still deadlocked over legislation.
The most recent attempt was made by House Financial Services Committee Chair Patrick McHenry (R-N.C.) to affix the crypto market structure bill, which was approved by both his committee and the House Agriculture Committee, to the National Defense Authorization Act for fiscal year 2024. The yearly defense policy bill included noncrypto concessions gained by McHenry’s campaign, but Democratic opposition to his plan meant that its inclusion would have killed the larger package, which was unacceptable to the congressional leadership.
In fact, McHenry’s opposition to the final draft of the NDAA eliminated a provision that would have required the cryptocurrency industry to comply with additional anti-money laundering regulations. Members of the Senate on both sides of the cryptocurrency debate, such as Elizabeth Warren (D-Mass.) and Cynthia Lummis (R-Wyo.), supported the proposal, so it wasn’t particularly contentious. Since McHenry pushed the NDAA to eliminate all financial services-related provisions, crypto legislation was caught in the crossfire, this rebuttal was not directed towards cryptocurrency.
House Republicans hold out some hope that 2024 will be better despite these setbacks. The head of the House Digital Assets Subcommittee, Representative French Hill (R-Ark.), stated last month on CNBC’s “Squawk Box” that floor votes on the bills pertaining to market structure and stablecoins might take place “early in 2024.”
Finding floor time for the legislation will be the most challenging task, as at least January will probably be devoted to preventing a government shutdown. In mostly partisan votes, the bills would have a decent chance of passing if they were put to a vote. Like the committee markup, the bills might receive support from some Democrats. However, it is unlikely that there would be much support in the absence of revisions. The stablecoin plan is still the greatest chance to draft a comprehensive, cross-party law. The House will now negotiate the bill as the Senate Democratic leadership has shown little interest in the proposal.
McHenry’s retirement, which Politico first revealed on Tuesday, is one new element in this controversy. McHenry has been a leading voice for the digital asset sector in Congress and has held a significant position as chair of the House Financial Services Committee. McHenry plans to finish out his term, so he will hold the gavel until the following year.
McHenry, however, will want to put up a strong fight to secure legacy legislation between now and the August 2024 break because he is nearing the end of his time in Congress. One of his two cryptocurrency bills might be that. Although it is unlikely that the chair will compromise his principles in order to close a deal, McHenry might be more willing to do so than he otherwise would be given that he is leaving office.
These prospective future chairs, fortunately, are all generally understanding of the cryptocurrency industry. How each of the possible successors prioritizes the committee’s agenda will be the biggest distinction between them. Given that he collaborated with McHenry on the bill’s drafting last year and that he is likely to prioritize cryptocurrency, Hill might be the industry’s top pick for digital assets. All the options, however, would not be hazardous.
The results of the 2024 elections, which will determine who controls the White House and Congress, will have a major impact on the likelihood of success for any of these upcoming legislative campaigns. Even if McHenry’s two bills are not signed into law, they will still be used as a model for future legislation.
If an exchange-traded fund with the symbol Bitcoin is approved in January, however, lawmakers’ perspectives on these measures might change. This is especially true if regulators decide that more legislation is necessary to give them the necessary authority to monitor the cryptocurrency industry. However, a black swan event that jeopardizes wider financial stability may be the only thing that can overcome the inertia required to see these measures through completion. Congress will not act on its own, as 2022 showed when disruption in the digital asset space occurred.
