Members of the Republican Financial Services Committee stated that the United States is at risk of losing its digital asset ecosystem due to steps made by the current administration.
Ahead of the inaugural hearing of the United States House of Representatives subcommittee on digital assets, financial technology, and inclusion, Republican legislators’ statements reveal political differences on crypto regulation.
Republicans on the House Financial Services Committee stated in a document dated March 6 that the inaugural hearing of the Subcommittee on Digital Assets, Financial Technologies, and Inclusion would focus on the “assault on the digital asset ecosystem” by the Biden administration. The hearing is slated on March 9 and will be one of the first since Representative Patrick McHenry assumed his position as a committee chair at the start of the 118th Congress.
According to the memo, the Biden administration has published comments and proposed rulemaking that have negatively impacted the digital asset ecosystem during the past two years.
“Several of these measures can be viewed as an abuse of jurisdictional power. Nevertheless, the effects of these policies cannot be overstated. Due to steps done by this administration, the United States risks losing its position as the global leader in the digital asset ecosystem.”
Representatives of the cryptocurrency sector, such as BitGo co-founder and CEO Mike Belshe and Coinbase chief legal officer Paul Grewal, are anticipated to appear at the meeting. In addition, the subcommittee is reviewing five crypto-related legislative proposals, including the Keep Innovation in America Act proposed by McHenry.
“Regulators can either proclaim that digital assets are governed similarly to other assets and use the same rules, or they can declare that digital assets are distinct and create new regulations,” Belshe stated in his prepared testimony. “But, regulators may not assert that assets are unique and the regulations are already understood.”
Following studies by federal agencies, the White House issued in September 2022 a complete framework for digital assets with six primary directions for crypto legislation in the United States. Tonya Evans, a Penn State Dickinson Law professor who is also expected to testify at the hearing, stated in prepared remarks that this framework “has yet to fulfill its promise.”
“The Administration’s proposed framework was more of a report of initial agency findings and suggestions than a framework upon which regulated parties might legitimately expect to operate lawfully within clear rules of engagement for this innovative, programmable, dynamic asset class.”
Almost one year has passed since U.S. President Joe Biden signed an executive order to establish a regulatory framework for digital assets. The directive has prompted federal departments to investigate the possible impact of cryptocurrencies on the U.S. financial system and, in some instances, to provide regulatory suggestions.