Efforts to pass U.S. crypto legislation face challenges, potential passage in 2024

U.S. Rep. French Hill

1st December 2023 – (Washington) Lawmakers involved in the development of U.S. crypto legislation are eyeing 2024 as the potential year for the passage of digital asset bills in the Republican-controlled House of Representatives. Despite the optimism, the legislation still faces obstacles in the Senate, where Democrats hold sway.

US Representative French Hill (R-Ark.), chairman of the House Financial Services Committee’s subcommittee on digital assets, acknowledged that the House’s consideration of two significant crypto bills—one aimed at regulating U.S. stablecoin issuers and another focused on establishing comprehensive rules for crypto markets—has likely been pushed to “early 2024.”

The recent clash among House Republicans over the appointment of a new speaker, which temporarily involved key crypto negotiator Representative Patrick McHenry (R-N.C.) as stand-in speaker, delayed the floor time required for the legislation, according to Hill, who made the remarks at a Blockchain Association event in Washington.

Senator Cynthia Lummis (R-Wyo.), also speaking at the same event, commented, “That, I think, set us back a little bit.” Lummis, who has been championing her own extensive crypto legislation in the Senate, suggested that progress on the stablecoin bill, in particular, could be expected in early 2024.

Representative Jim Himes (D-Conn.), a key figure in the House negotiations for both bills, stated that the industry needs to counter the views expressed by House Democrats and outside groups, as well as those of US Securities and Exchange Commission Chair Gary Gensler, who has been a vocal critic of the crypto industry.

Himes, one of the few Democrats on the House Financial Services Committee to defy his party’s ranking member in support of both crypto bills this year, noted that Representative Maxine Waters (D-Calif.), the committee’s top Democrat who withdrew her support, has indicated that she remains open to advancing the legislation. Himes added that if Waters comes on board and the House as a whole approves a bill, “a Democratic Senate sits up and takes notice.”

Referring to the Senate, Himes described the crypto views of certain Senate Democrats, including Senator Sherrod Brown (D-Ohio), who chairs the Senate Banking Committee, as less favourable. Himes stated, “You could see a path, but I think it probably starts with a strong bipartisan vote” in the House.

Lummis, a member of the Senate Banking Committee, acknowledged that cracking the committee has been challenging, but she expressed optimism, pointing out that the U.S. Department of the Treasury’s recent proposal on crypto illicit finance policies indicates a willingness to negotiate, which could influence Senate Democrats.

Hill argued that recent events, such as the collapse of FTX last year and the significant settlement and criminal conviction of Binance, should motivate lawmakers to pursue legislation. He contended that each instance of misconduct “only reinforces that we need to do this and do it the right way,” as the absence of regulations “advantages illicit finance.”

Even if a crypto bill passes the House next year, it still requires approval in the Senate and the president’s signature. In practical terms, this may involve incorporating it into a more comprehensive package and attaching it to must-pass legislation, like a spending bill.

Senator Kirsten Gillibrand (D-N.Y.), who has collaborated with Lummis on crypto legislation, cautioned the industry during the event, stating, “Passing laws takes time.”