McHenry Delivers Remarks at Hearing on the Future of the Digital Asset Ecosystem
Washington,
June 13, 2023 -
Today, the House Financial Services Committee, led by Chairman Patrick McHenry (NC-10), is holding a hearing on the future of the digital asset ecosystem. The Committee will consider discussion drafts to provide statutory frameworks for digital asset regulation and stablecoin issuance. Both discussion drafts will provide robust consumer protections while allowing financial innovation to flourish in the U.S.
Watch Chairman McHenry’s opening remarks here.
Read Chairman McHenry’s opening remarks as delivered:
“Nearly 15 years since the Bitcoin White Paper, an idea has become the new internet architecture, with ownership, digital identity and value storage native to technology.
“Digital assets are now no longer a new technology—they are used all over the world. America has always led technology invention and, if not invention, implementation. Today we are at risk of falling behind competitors around the globe.
“This hearing has been years in the making—bipartisan years in the making.
“Over the past several months, this Committee has engaged in an unprecedented joint effort with our colleagues on the Agriculture Committee.
“Earlier this month, Chairman Thompson and I, along with Subcommittee Chairs French Hill and Dusty Johnson, released a discussion draft that would close the gaps between our securities and commodities laws and provide much needed clarity for digital assets.
“We adhere to the time-tested principle of ‘same risk, same regulation,’ while modernizing our regulatory framework to better match this innovative technology. In fact, requirements set out in the draft bill are much more onerous than the requirements for traditional financial intermediaries.
“As I’ve said at all of our markups, I have an open door. This should be a bipartisan process, and I intend it to be.
“So, please share your input; this is a draft bill. There’s plenty of time for members to find common ground on how we legislate. But be advised, I intend for this Committee to mark-up some form of this legislation when we return from the July 4th recess.
“Let’s start with where I know we all agree—consumer protection. The draft bill would require trading platforms to comply with strict requirements regarding the segregation of customer assets, similar to most traditional intermediaries.
“We also address how digital asset issuers raise capital for their projects. The U.S. has the deepest and most liquid capital markets in the world. We intend to keep that—we want to keep that strategic advantage here in the United States to the best of our ability.
“We know informative disclosures are critical to helping investors make informed decisions.
“By making disclosures fit-for-purpose, the draft bill will ensure issuers provide users with necessary information, including the number of tokens in circulation, the concentration of assets held by affiliates, and much, much more.
“Additionally, we enhance the SEC’s ability to detect and punish fraudulent actors and activity.
“Today, traditional financial intermediaries are registered with a federal regulator. Digital asset trading platforms should be no different. The draft legislation will establish requirements for digital asset trading platforms, ensuring Americans and their assets are protected.
“The draft bill will provide a workable path for trading platforms to register with the SEC and/or the CFTC.
“It provides clarity to those assets that are offered as part of an investment contract, and therefore a security.
And I would submit, the central part of this bill is this: a workable timeframe in a workable time period for assets, started as part of an investment contract, to transition to a digital commodity, if the network is functional and decentralized. I think that is the central piece of this legislation that our discussion should be focused on.
“Let me close with this. We are at a critical moment for American dynamism. We can choose the side of financial freedom, innovation, inclusion, and American competitiveness and important consumer protections at the same time.
“Or we can let this moment pass us by and surrender our leadership of the global financial system to other countries.
“I hope we will choose the former.”
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