House Republicans are ramping up work on a comprehensive plan to revamp cryptocurrency regulation, a key lawmaker in the effort said Wednesday.
What's happening: GOP members of the House Financial Services Committee have started to float smaller, more targeted crypto proposals that may get a vote later this month. But Rep. French Hill, the Arkansas Republican who leads the panel's digital assets subcommittee, said in an interview that the longer-term plan is to go bigger.
“We’re working on a comprehensive regulatory framework that goes beyond the bills," Hill said. "We're going to spend March and April in a significant effort on listening to stakeholders in the digital assets arena [and] considering other legislative proposals. So that'll be our principle work plan for the next two months."
Why it matters: It's unclear what the committee will propose, but the effort comes as federal banking and markets regulators ramp up enforcement of traditional financial regulations in the crypto space. Digital asset firms are urging Congress to carve out a specialized rulebook for crypto, as some jurisdictions like the European Union have started to do.
The recent crackdown by U.S. agencies will be the focus of a subcommittee hearing that Hill will lead Thursday. It will feature testimony from Paul Grewal, chief legal officer of the U.S.-based crypto exchange Coinbase.
"Europe, the U.K., Australia and Singapore — just to name a few — are putting in place regulatory frameworks that are creating high standards for crypto,” Grewal said in prepared remarks. “It is truly a race to the top, and the U.S. is already behind.”
Fed Chair Jerome Powell, testifying on Capitol Hill this week, suggested it would be a good idea for Congress to weigh in. Hill pressed him on it Wednesday.
"I do think it would be important for us to have a workable legal framework around digital activities," Powell said Tuesday. "That is important, and something Congress in principle needs to do because we can't really do that."
Hill dropped some possible hints Wednesday about the GOP's direction on a crypto regulation plan.
During the hearing, he asked Powell if a U.S. digital asset framework would help banks, brokers and custodians understand how they could participate in the market safely. He also asked if it should preserve the role of state regulators in overseeing the industry.
Republicans signal crypto support: Thursday's digital assets subcommittee hearing will showcase a handful of Republican-led crypto bills that are generally supportive of the industry and its customers. The legislation may get a committee vote at a markup planned for March 28.
“I’m not sure that we’ll mark them up there, but we’re talking about it,” Hill said. “We may have some other ones introduced, so we may have some other priorities.”
The bills include proposals that would express congressional support for blockchain tech and digital assets, exempt blockchain developers from some reporting and licensing requirements and scale back tax reporting requirements for crypto firms.
The Senate: Senate Agriculture Chair Debbie Stabenow (D-Mich.), who has floated her own crypto regulation plan, said Wednesday she has "had some conversations" with her House counterparts.
"There's certainly, I think, a general belief that this is an area that needs to be regulated, so [as] to protect consumers," she said.
Asked whether she expected lawmakers to reach agreement, she replied: "I'm actually optimistic. I think the hard part is the farm bill."
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