US financial services chair to spearhead legislation introducing digital asset clarity

The Committee on Financial Services Chairman Patrick McHenry has today announced that on Wednesday, July 26, the Committee on Financial Services will meet for markup of legislation that will clarify the digital asset ecosystem and address national security concerns. 

McHenry to spearhead digital asset clarity

The Committee on Financial Services legislation session will focus on several key pieces of legislation, headed by McHenry. Rep. GT Thompson (R-PA) proposed the Financial Innovation and Technology for the 21st Century Act on July 20, 2023. It creates a framework for the digital asset market structure suitable for the special features of digital assets. This practical approach will safeguard consumers and investors while laying out clear guidelines for market players. McHenry, in a Twitter post, has applauded the Financial Committee members for their hard work bringing more clarity to the ecosystem.

On July 20, 2023, Chairman McHenry laid out the Clarity for Payment Stablecoins Act. For the production of payment stablecoins that are intended to be used as a form of payment, it offers a clear regulatory framework. The framework establishes a personalized strategy for new entrants into the market, which promotes innovation while mitigating any dangers posed by payment stablecoins.

The Act presented by Rep. Tom Emmer, the Blockchain Regulatory Certainty Act, will also be a subject of discussion. As long as they do not have authority over digital assets, the Act offers blockchain developers and service providers a safe harbor from licensing and registration.

Rep. Zach Nunn presented the Financial Technology Protection Act 2023 on April 27, 2023. It creates a working group inside the Department of Treasury called the Independent Financial Technology Working Group to Combat Terrorism and Illicit Financing to investigate how terrorists use new financial technology, such as digital assets, and provide a report on their findings. 

Other acts to address national security

There will also be other legislation that do not directly deal with digital asset clarification. Rep. Blaine Luetkemeyer brought about the Stop Fentanyl Money Laundering Act of 2023 on May 11, 2023. Concerning the funding of illegal fentanyl and illicit drugs, it gives the Treasury Secretary the power to take exceptional action against specific foreign companies of major concern for money laundering.

According to the No Russian Agriculture Act, which Rep. Maxine Waters introduced on July 20, 2023, the U.S. Executive Directors of the International Financial Institutions shall use their voice, vote, and influence to persuade the IFIs to fund projects that lessen other countries’ reliance on Russian agricultural products, particularly fertilizer and grain, and to encourage private investment in such projects.

The Exposing China’s Support for the Taliban Act will also be discussed. It came about on July 20, 2023, when Stephen Lynch introduced it, cosponsored by Rep. Nunn. The Act states that the Treasury needs to carry out a study and give Congress a brief of China’s activities in connection with the finances of the Taliban and Afghanistan.

McHenry looking to end crypto muddle

The European Union legally adopted its Markets in Crypto Assets regulation into law. Brazil recently passed a legislative law designating its central bank as the key regulator, and even Hong Kong is forcing banks to accept cryptocurrency exchanges as clients. 

On the other hand, the U.S. has dragged its feet after looking poised to accomplish numerous bipartisan initiatives at the close of last year owing to the disastrous impact of FTX. Democrats in the body showed remarkable hesitancy on easy targets like stablecoin regulation after Republicans assumed control of the House Financial Services Committee, responsible for overseeing the Securities and Exchange Commission and regulating the securities market.

McHenry has, however, been trying to foster more regulation to clear up the confusion. He collaborated on a long-awaited market structure bill with Republicans from the House Agriculture Committee, which supervises the CFTC, in early June. The following week, he unveiled a revised version of the stablecoin legislation that took Democratic viewpoints into account. Despite the development, the vigorous SEC enforcement has largely overshadowed McHenry’s minor wins.

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