McHenry to Waters: We Must Work Together to Create Opportunities that Allow Digital Assets to Flourish

McHenry to Waters: We Must Work Together to Create Opportunities that Allow Digital Assets to Flourish

Washington, January 24, 2022 -

Today, the top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), sent a letter to Financial Services Committee Chairwoman Maxine Waters (CA-43). In the letter, Republican Leader McHenry urges 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.

Read the full letter to Chair Waters here.

Read excerpts from the letter:

"Dear Chairwoman Waters:

"I write to commend you on last month's hearing titled: "Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States." I appreciated the opportunity to work together and believe the hearing struck the right tone for members to better understand this nascent industry and the issues raised by digital assets. It also reaffirmed the complexity of digital assets, only scratching the surface on the breadth of issues that the Financial Services Committee must examine to ensure the policies Congress pursues will nurture innovation in the United States. As you look to schedule additional hearings, I believe it is critical that we thoroughly review the current environment and prioritize the issues that must be addressed.

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"Digital assets hold great promise. Over the last several years, advanced technology has moved digital asset activities from the periphery to the mainstream. Digital assets have great potential to address wealth gaps in new and innovative ways. They have the potential to revolutionize our payment system. This is positive for all Americans. Recent interest by other Committees, the Department of Treasury, and other federal agencies only underscores this industry's importance not only to the financial system but to the broader economy. Thus, neither this Committee's nor Congress' oversight and response should be ad hoc. There should be broad, bipartisan consensus among policymakers as to the appropriate policy solution on several important issues as outlined below.

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"Central to this discussion is the treatment of certain digital assets. While both Chairmen Benham and Gensler have been extremely vocal, neither the Commodity Futures Trading Commission (CFTC) nor the Securities and Exchange Commission (SEC) positions on digital assets is based in statute.

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"The inconsistent treatment and jurisdictional uncertainty have only exacerbated confusion in the marketplace. As a result, market participants will look outside the United States. We should not cede these important issues to regulators such as SEC or CFTC, or to the judicial branch, to determine. This Committee should do its work to appropriately categorize these assets and determine the rules that will govern their use. Additionally, as discussed in the hearing, U.S.-based trading platforms are not currently under the direct jurisdiction of either the SEC or CFTC. The Committee should further examine whether increased federal regulation of cryptocurrency trading platforms is necessary or appropriate. We should ensure there is transparency, accountability, and appropriate compliance with anti-money laundering regulations in the marketplace.

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"Chairwoman Waters, the issues raised above are not exhaustive. Moreover, we both understand that uncertainty in this industry will only hurt innovation. We must work together to create opportunities that allow these technologies to flourish without stifling them in their infancy. At the same time, we must ensure that both consumers and investors have the information they need to make good decisions. These are not decisions that should be made by regulators but by policymakers."

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