Discover the latest news at the crossroads of cryptocurrencies and governments by subscribing to State of Crypto, our informative newsletter from CoinDesk. Click here to secure your spot for upcoming editions.

‘Two-thirds … is extraordinary’

The narrative

Last month at CoinDesk’s Consensus 2024 event, Rep. Patrick McHenry (R-N.C.) shared insights on various topics including the Financial Innovation and Technology for the 21st Century Act (FIT21) and his journey becoming Speaker Pro Tempore. The following questions have been condensed, while the Congressman’s remarks have undergone minimal edits.

Why it matters

The Congressman plays a pivotal role in cryptocurrency communities, pushing for laws and championing causes within this realm. Recently, he spearheaded a bill that successfully passed through the House.

Breaking it down

As an analyst looking back, I can’t help but be eager to delve into the latest developments. Let me take you back to the final weeks of May last year. Unquestionably, the House made a significant move with an overwhelming approval of the FIT21 bill. But what led us to this point?

Approaching two-thirds of House members approving a bill is remarkable, especially when dealing with a straightforward policy or an innovative, unprecedented one. Reaching this milestone was achieved through a combination of valid policy proposals and genuine innovation, as well as fostering relationships within the House.

We have genuine innovation taking place with builders utilizing authentic technology. The technology is advancing, but we must demonstrate the significance of this innovation to policymakers. In recent times, we’ve witnessed substantial progress in this regard. Additionally, I’ve formed meaningful connections with policymakers such as French Hill, Glenn Thompson, and Dusty Johnson, alongside Democrats like Wiley Nickel from North Carolina, Jim Himes, Brittany Pettersen from Colorado, and Josh Gottheimer, among others. These relationships have put pressure on policymakers to act upon our concerns, leading to substantial progress. This momentum provides us with an excellent chance to pass legislation this year.

As a crypto investor, I’m pondering over the current state of the bill and wondering about its future direction. The crucial query on everyone’s mind is: “What happens next with this legislation?”

Moving forward, it’s positive that the White House has not threatened a veto on FIT21. This demonstrates their willingness to collaborate and shape policies. However, dealing with the Senate can be intricate, as we all know. To advance this legislation in the election year, we must engage senators extensively and ensure they prioritize it. If we manage to secure a two-thirds majority vote in the House, we may be able to replicate that success in the Senate.

Are we observing an unusual number of cryptocurrency-related bills, such as the SAB 121 repeal and the FIT21 Act, being put to a vote this year in the House and Senate by lawmakers from both parties? Or is it the case that these particular bills have only just been introduced for consideration for the first time?

A new policy has been announced. There have been reports from external sources and media outlets about the existence of “crypto voters.” I believe this group exists, as they lean towards different political candidates. However, their primary concern is determining if you are open to innovation and supportive of cryptocurrencies. This interest may have influenced policymaking in a more favorable direction for crypto.

As an analyst, I find it intriguing that the debate in Washington revolves around financial policies stemming from the last crisis. However, cryptocurrencies represent a distinct domain, unconstrained by the political dynamics of traditional finance post-crisis. This is about innovation policy and the future technological foundation, potentially surpassing the internet’s impact. We aim to lead this movement rather than following Europe and the EU in its development. Consequently, it’s essential for us to establish a regulated framework for utilizing and constructing this technology domestically, avoiding being left behind in the global race.

As a researcher looking back on last year’s discussions regarding the potential passage of a crypto bill in Congress, I’m curious to learn about your experiences firsthand. Could you please share some insights into the specific hurdles you encountered during this process and ultimately, how things unfolded?

Previously, we discussed under this format, I hadn’t anticipated assuming the role of Speaker Pro Tem. I wasn’t prepared for our Speaker of the House to be expelled over mere legislative accomplishments. I found it hard to believe my party would make such a move. However, unexpected events transpired, and I filled in as Speaker Pro Tem for 23 days last October. This sudden change disrupted our legislative plans significantly. Consequently, I shaped my committee agenda based on the legislative landscape that I assumed would prevail.

Unforeseen events caused significant setbacks when we last discussed implementing crypto policies and FIT21, pushing both back by approximately five to six months. However, these delays brought about relationship-building, innovation, and policy refinement. As a result, FIT21 garnered stronger support in the House, increasing our chances of success in the Senate and ultimately securing presidential approval – be it from this or the next presidency.

I’m interested in hearing your thoughts on the current state of stablecoin legislation. With it appearing to be a strong contender for passage in the near term, I’m eager to understand what progress is being made and what your predictions might be now.

At this point in time, it is highly likely that crypto laws will be enacted within the next year. This is a firm belief of mine. If it doesn’t come to pass by then, between now and the upcoming election, I am confident that the bills already passed in the House will be transformed into law under the next congressional administration.

In simpler terms, we’re on the verge of passing stablecoin legislation in the Senate, but we need a definite schedule to make it happen. This requires setting aside sufficient time for the process. Given the current momentum towards crypto regulation, it’s only a matter of time before comprehensive crypto policies and laws are implemented. By doing so, we’ll align ourselves with other leading countries in terms of market stability and pro-crypto innovation.

As an analyst, I’d rephrase that by saying: “During today’s event, Majority Whip Tom Emmer proposed the idea that the lame duck session could serve as a viable chance for attaching crypto legislation to must-pass bills. Are there any pending pieces of legislation expected to progress during this timeframe that you believe could potentially accommodate such crypto-related provisions?”

In simpler terms, I’m searching for anything and everything that could potentially be beneficial. We’ve reached an agreement in the House of Representatives on a product with broad support, which presents us with a significant opportunity to turn it into law. It’s crucial that we seize every chance we get to secure favorable outcomes.

From my perspective as a crypto analyst, I’m always on the lookout for potential regulatory developments that could impact the crypto market in meaningful ways. Specifically, I’ve been considering two areas: clarification of regulatory frameworks for crypto exchanges and stablecoins, and exploration of how legislation might facilitate cross-border transactions within the crypto ecosystem. These are just a few of the issues I’m currently examining.

In this unusual political scenario, a bill passed through the House of Representatives with nearly unanimous Republican support and a third of Democratic approval – an accomplishment almost unheard of in committees like Agriculture or Financial Services. This achievement is significant, and our primary goal should be to build upon it by passing the market structure bill. If we manage to do that, we will establish a leading position in global digital asset policy. That’s where we aim to be, and that’s what I am advocating for.

At the conclusion of your current term, you’ve shared your intention to retire. The remaining seven months present an intriguing question: Are there specific objectives or legislative initiatives, beyond crypto and in addition to what has already been passed through the House, that you’re eager to complete during this period?

As a financial analyst, my top three priorities for the Financial Services Committee include:

Although I understand that you need to take part in a jump, I truly value your presence with us. Wishing you success for the remainder of your term.

Appreciation goes out to you, Nik, and to all members of the crypto community: activists, digital asset enthusiasts, and supporters. Your unwavering engagement through tweets, phone calls, and emails played a significant role in bringing about this major House vote. Without your collective efforts, we wouldn’t have reached this milestone.

As a dedicated crypto investor, I urge us all to continue pushing the boundaries of innovation and progress. Let’s not falter or lose steam; instead, let’s keep driving and creating new solutions. By doing so, we can triumph over any challenges that come our way and bring clarity to our endeavors under the law. I deeply appreciate your active participation in this journey, and I value our shared friendship. May blessings be upon us all.

Stories you may have missed

This week

This week

Elsewhere:

If you have ideas or queries regarding future topics or any feedback in general, please don’t hesitate to reach out to me via email at nik@coindesk.com or connect with me on Twitter @nikhileshde.

You can also join the group conversation on Telegram.

See ya’ll next week!