Patrick McHenry, who previously served as chair of the House Financial Services Committee, expressed skepticism that the incoming Democratic-controlled House would be able to advance legislation targeting cryptocurrencies. Speaking on Unchained’s Bits + Bips podcast on November 9, McHenry addressed the increased focus on crypto from Sen. Elizabeth Warren and her renewed regulatory push.
Political landscape and Congressional dynamics
Following the November 3 midterm elections, Democrats secured control of both chambers of Congress, winning at least 54 Senate seats. Races in Mississippi and Alaska remained undecided at the time of his remarks. In January, Elizabeth Warren is expected to become chair of the Senate Banking Committee, solidifying her influence on financial regulation in Congress.
Despite this, McHenry characterized the new Congress as markedly more favorable to the crypto industry compared to its predecessors six or eight years ago, spanning both major parties. He emphasized the importance of maintaining and strengthening the current political support for digital assets, cautioning the industry to continue building awareness and favor among lawmakers.
McHenry argued that the composition of Congress has shifted over time, noting that current lawmakers are generally more amenable to cryptocurrencies than those from earlier sessions.
Regulatory uncertainties and pending legislation
McHenry also addressed the status of several key regulatory efforts. He said the repeal of the GENIUS Act’s stablecoin provisions remained unlikely, but pointed to broader market uncertainties tied to Congress’s failure to pass the Clarity Act which aims to set clearer trading guidelines for crypto. Justin Slaughter from Paradigm, a prominent crypto investment firm, previously suggested the Clarity Act currently has little momentum in Congress.
Turning to regulatory oversight, McHenry explained that Commodity Futures Trading Commission (CFTC) Chair Michael Selig currently lacks statutory authority over crypto spot markets, where tokens are directly bought and sold. He argued that Congress must explicitly grant this oversight to ensure effective market regulation. In comparison, Securities and Exchange Commission (SEC) Chair Paul Atkins, according to McHenry, retains broad latitude in overseeing crypto trading.
He cautioned that a future administration could potentially appoint new regulators less supportive of digital assets, referencing the tenure of former SEC Chair Gary Gensler. In such a scenario, McHenry suggested that the presence of enough pro-crypto lawmakers in Congress would be critical to counterbalance any potential policy shift.
Mini dictionary: Commodity Futures Trading Commission (CFTC) is the US federal agency regulating futures and options markets. It has been seeking a more defined authority over digital asset markets, especially regarding spot trading of cryptocurrencies.
Other financial policy issues
In response to a question from podcast co-host Ram Ahluwalia about limiting credit card interest, McHenry stated it is plausible that both the House and Senate could pass a measure to cap credit card rates, as well as enact the Credit Card Competition Act. He identified Elizabeth Warren, President Donald Trump, and Vice President J.D. Vance among the high-profile supporters of such reform.
Trump has previously advocated capping credit card rates at 10% for one year and also endorsed the competition bill. The proposed legislation mandates that banks with assets exceeding $100 billion must offer merchants the option of two unaffiliated card networks for transactions, at least one of which cannot be Visa or Mastercard. McHenry indicated that stablecoins now represent a key source of competition in the payments sector.
Regarding the evolution of progressive policies under Democratic leadership, McHenry stated that while figures like Warren remain influential, their ability to advance anti-crypto measures appears diminished in the current Congress compared to when President Joe Biden first assumed office.
He noted that while progressive stances continue to affect some areas of policy, anti-crypto sentiment no longer holds the sway it once did among Democratic lawmakers.
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