Republican members of the Financial Services Committee are directly criticizing the Biden administration for its policies on digital assets, claiming that they risk pushing the industry overseas. The statements were made ahead of the inaugural hearing of the United States House of Representatives subcommittee on digital assets, financial technology, and inclusion, which is set to take place on March 9.
In a memo dated March 6, the House Financial Services Committee Republicans stated that the hearing would focus on the Biden administration’s “attack on the digital asset ecosystem.” The lawmakers claimed that the administration’s statements and proposed rulemakings had inappropriately impacted the digital asset ecosystem and constituted an overreach of jurisdictional authority.
The memo further stated that the consequences of these policies could not be understated, and that the United States was at risk of pushing the digital asset ecosystem overseas. The hearing is set to review five pieces of crypto-related draft legislation, including the Keep Innovation in America Act, proposed by Committee Chair Representative Patrick McHenry.
Several prominent figures in the crypto industry, including BitGo co-founder and CEO Mike Belshe and Coinbase chief legal officer Paul Grewal, are expected to testify at the hearing. In his prepared testimony, Belshe stated that regulators could either declare that digital assets are regulated in the same way as other assets, or they could say that they are different and create new rules. However, he added that regulators cannot claim that assets are different and simultaneously claim that the rules are already understood.
1/5 Tomorrow I will speak on Capitol Hill about the need for a workable crypto regulatory framework. We must fix our financial system, embrace the benefits of crypto, and protect consumers. Read a summary of my full message here: https://t.co/FUuachco32
— paulgrewal.eth (@iampaulgrewal) March 8, 2023
The White House released a comprehensive framework for digital assets in September 2022, outlining six principal directions for crypto regulation in the U.S. However, according to Tonya Evans, a professor at Penn State Dickinson Law who is set to appear as a witness at the hearing, the framework has yet to fulfill its promise. In prepared remarks, she stated that the administration’s proffered framework served more as a report-out of initial agency findings and recommendations than a workable framework.
The subcommittee hearing comes one year after U.S. President Joe Biden signed an executive order aimed at establishing a regulatory framework for digital assets. The order has prompted federal departments to study the potential impact of cryptocurrencies on the U.S. financial system and develop policy recommendations.
In conclusion, the partisan divide on crypto regulation is becoming increasingly apparent, with Republican lawmakers directly criticizing the Biden administration’s policies. The upcoming hearing is expected to shed light on the lawmakers’ concerns and provide insights into the future of digital asset regulation in the U.S.
