Blog: McHenry Statement on Biden Administration’s Digital Assets Reports | Financial Services Committee Republicans – Financial Services Committee | Republicans


McHenry Statement on Biden Administration’s Digital Assets Reports



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Washington,
September 16, 2022 

Today, the top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), issued the following statement regarding the reports released by the Biden Administration under Executive Order 14067—Ensuring the Responsible Development of Digital Assets.

“Reports are not a substitute for legislative clarity,” said Republican Leader McHenry. “The digital asset ecosystem is a critical component of the future of U.S. growth and competitiveness. Instead of acknowledging this fact, the Biden Administration is largely focused on the potential risks of digital assets. With clear rules of the road, this innovative technology can revolutionize our financial markets, modernize our payments system infrastructure, and provide new opportunities to consumers. Also glaringly absent from these reports is any significant acknowledgement of the benefits that stablecoins—if issued under a clear regulatory framework—can provide to our payments system and consumers.

“Republicans have consistently said the benefits of a potential U.S. CBDC must outweigh the risks—these reports fail to make the case. The Biden Administration has not adequately identified what problems a CBDC would solve or whether private sector payment solutions could provide a better alternative. 

“Bottom line, regulation by enforcement without clear rules of the road from Congress is not the solution. We must create a regulatory framework that fosters American innovation, while also protecting consumers. It is critical that Congress continues to engage in a bipartisan, bicameral way to manage risk, while still enabling the digital asset ecosystem to thrive in the U.S.”

Background:

On March 8, 2021, the top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), and the Chair of the Task Force on Financial Technology, Stephen Lynch (MA-08) introduced H.R. 1602, the Eliminate Barriers to Innovation Act, to require the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to establish a digital asset working group to ensure collaboration between regulators and the private sector to foster innovation.

On April 20, 2021, the House passed Republican Leader McHenry’s bipartisan bill, H.R. 1602, the Eliminate Barriers to Innovation Act, to establish a digital asset working group to ensure collaboration between regulators and the private sector to foster innovation.

On April 20, 2021, Republican Leader McHenry, along with the current and former Republican leaders of the Committee’s Task Forces on Financial Technology and Artificial Intelligence, French Hill (AR-02), Tom Emmer (MN-06), and Barry Loudermilk (GA-11), released a Republican staff report outlining the work of the task forces in the 116th Congress and providing recommendations as to how we can fully utilize innovation to create a more inclusive financial system.

On August 11, 2021, Republican Leader McHenry released a statement slamming SEC Chair Gary Gensler’s jurisdictional power grab of all exchanges of digital assets—not all of which are securities.

On August 16, 2021, Republican Leader McHenry and the top Republican on the House Agriculture Committee, Glenn ‘GT’ Thompson (PA-15), sent a letter to SEC Chair Gensler and Commodity Futures Trading Commission (CFTC) Acting Chairman Rostin Behnam. The letter directs the agencies to establish a joint Working Group on Digital Assets to give market participants and stakeholders a seat at the table alongside regulators to bring much needed clarity to this rapidly growing industry.

On September 23, 2021, the House passed the National Defense Authorization Act (NDAA) for fiscal year 2022, which included Republican Leader McHenry’s bipartisan Eliminate Barriers to Innovation Act.

On October 5, 2021, Republican Leader McHenry introduced H.R. 5496, the Clarity for Digital Tokens Act ensures our regulatory framework embraces new technology and innovation by providing a “safe harbor” for startup digital asset projects, while maintaining important investor protections—providing much-needed legal clarity and certainty for this rapidly growing industry.

At an October 5, 2021 hearing with SEC Chair Gensler, Republican Leader McHenry raised concerns that Chair Gensler will run roughshod over appropriate process to implement Democrats’ agenda and push financial innovation overseas.

Also on October 5, 2021, Republican Leader McHenry sent a letter to SEC Chair Gensler demanding he clarify his concerning and contradictory public remarks regarding the SEC’s authority to regulate the digital asset ecosystem.

On October 13, 2021, Republican Leader McHenry, along with the top Republican on the Subcommittee on Oversight and Investigations, Tom Emmer (MN-06), and the top Republican on the Task Force on Financial Technology, Warren Davidson (OH-08), sent a letter to Treasury Secretary Janet Yellen asking her to clarify how Treasury categorizes stablecoins and the regulatory implications that flow from its classification.

On November 1, 2021, Republican Leader McHenry released a statement regarding the report on stablecoins by the President’s Working Group on Financial Markets, along with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).

On November 9, 2021, Republican Leader McHenry introduced H.R. 5936, the Ransomware and Financial Stability Act to protect America’s critical financial infrastructure and set common sense guardrails on ransomware payments, which are often made using digital assets.

On November 15, 2021, all Committee Republicans, led by Ranking Member McHenry, released principles to guide Congress’ evaluation of potential proposals for a U.S. Central Bank Digital Currency (CBDC).

On November 17, 2021, Republican Leader McHenry, Congressman Tim Ryan (OH-13), and a bipartisan group of colleagues introduced H.R. 6006, the Keep Innovation in America Act to fix the digital asset reporting provisions in the Infrastructure Investment and Jobs Act, now law (PL 117-58), and provide clarity to technology innovators and entrepreneurs.

On November 18, 2021, Republican Leader McHenry sent a letter to Michael Hsu, the acting head of the OCC, requesting an update on the agency’s review of regulatory actions and guidance regarding financial technology, including digital assets.

On January 20, 2022, Republican Leader McHenry issued a statement regarding the Federal Reserve’s Central Bank Digital Currency discussion paper, in which he highlighted Committee Republicans’ CBDC principles.

On January 24, 2022, Republican Leader McHenry sent a letter urging Chair Waters to use future hearings on digital assets to review the current regulatory environment and to prioritize the related issues that must be addressed.

On January 27, 2022, Republican Leader McHenry led a bipartisan letter to Treasury Secretary Janet Yellen with all original cosponsors of his Keep Innovation in America Act. The letter urged her to provide additional clarity to America’s innovators and entrepreneurs regarding the digital asset reporting provisions in the Infrastructure Investment and Jobs Act.

At a February 8, 2022 hearing, Republican Leader McHenry outlined how stablecoins—if issued under a clear regulatory framework— hold promise as a potential cornerstone of a modern payments system.

On March 9, 2022, Republican Leader McHenry released a statement in response to President Biden’s Executive Order on Ensuring the Responsible Development of Digital Assets.

On April 18, 2022, Republican Leader McHenry and Investor Protection, Entrepreneurship, and Capital Markets Subcommittee Republican Leader Bill Huizenga (MI-02) submitted a public comment letter expressing concerns with how two recent Securities and Exchange Commission (SEC) rulemakings could impact the digital asset ecosystem, including decentralized finance.

On May 19, 2022, all Financial Services Committee Republicans—led by Republican Leader McHenry—sent a letter to Fed Chair Powell reiterating their CBDC principles and emphasizing the need for the benefits of a U.S. CBDC to outweigh the risks.

At a May 26, 2022 hearing on a potential U.S. CBDC, Republican Leader McHenry reiterated that neither Congress, nor the Fed should rush to issue a CBDC without fully understanding the risks to commercial banks, the existing payments system, and consumers.

On June 21, 2022, Republican Leader McHenry and Senator Cynthia Lummis sent a letter to Environmental Protection Agency Administrator Michael Regan urging him to fully study the potential environmental impacts of digital asset mining, including beneficial uses, before considering environmental regulation. 

On September 8, 2022, all Republican members of the Financial Services Committee—led by Republican Leader McHenry—sent a letter to Fed Vice Chair Brainard demanding she clarify her testimony on CBDCs, especially the Fed’s authority to issue one.

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