House Republicans plan crypto panel at first to oversee struggling industry

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McHenry disclosed the move when announcing broader plans for financial services subcommittees and their chairs.

Why it matters: The creation of the Digital Assets Panel underscores how crypto has come to dominate the financial regulatory agenda in Congress. In the past, the Financial Services Committee has largely focused on oversight of banks, Wall Street firms and their regulators.

The digital asset industry has become a lobbying force in recent years as startups attempt to lay the groundwork for a friendly regulatory environment, gaining allies on both sides of the aisle. Crypto firms now find themselves playing defense after a dramatic crash in recent months and the implosion of former giant FTX, which sparked accusations of fraud against exchange executives.

The new subcommittee will hold hearings and play a key role in the development of bills.

McHenry, who has put crypto regulation at the top of his legislative agenda, said the panel would be tasked with providing clear rules for federal regulators and developing policies that promote fintech to reach underserved communities.

We must answer for oversight and policymaking on a new asset class, he said.

Meet McHenry’s top lieutenants: McHenry has also named the chairs of its other financial services subcommittees, amounting to a major overhaul of the leadership structure. They understand:

Capital Markets Representative Ann Wagner of Missouri

Wagner hasn’t been shy about her focus on capital formation and so she’s in the right position to move policy forward, McHenry said.

Financial Institutions and Monetary Policy Representative Andy Barr of Kentucky

Barr brings a rural perspective, but hes [also] been a serious decision maker since coming here, McHenry said.

National Security, Illicit Finance, and International Financial Institutions Representative Blaine Luetkemeyer of Missouri

China is an imminent threat, McHenry said, and Luetkemeyer has a unique voice on this. He is also very knowledgeable for comprehensive monitoring of FinCEN.

Oversight and Investigations Representative Bill Huizenga of Michigan

Huizenga is in the right position to lead our surveillance initiative at a time when we have an administration that is well out of bounds, McHenry said.

Housing and Insurance Davidson

Bringing Davidson into the leadership team, he clearly had a deep interest in technology and is well versed in cryptocurrency, McHenry said. This brings his perspective to a subcommittee jurisdiction where it is necessary to inject these ideas. McHenry’s Dilemma: Subcommittee chairman assignments under the radar but Washington’s powerful perches marked McHenry’s first big challenge as he took the reins of financial services. He was bound to disappoint some of his best members no matter what he decided as he had to wrestle with how to handle term limits for Luetkemeyer and Huizenga as well as the interest of several members, especially Wagner, in Chair the Capital Markets Sub-Committee.

Luetkemeyer and Huizenga had reached six-year GOP term limits at the top of their longtime financial institutions and capital markets subcommittees, respectively, and will have new assignments this Congress. Wagner, who last Congress was the only Republican woman on the committee, was previously the top GOP member on the diversity and inclusion subcommittee.

It was unclear until Thursday whether McHenry would honor the Republicans’ internal term limit mandate, and his decision has come under intense scrutiny by lobbyists who work with the financial services.

I made it very clear to the leadership of our subcommittee that I was going to abide by the term limits of this subcommittee, McHenry said. It corresponds very well to the talents of the people, to their ability. This means bringing new opinions to all sub-committees.

A new approach to diversity and inclusion: McHenry is dropping the diversity and inclusion subcommittee created by Rep. Maxine Waters (D-Calif.), who chaired the committee when Democrats had a majority.

In his place, McHenry tasked each sub-committee with identifying best practices for strengthening diversity and inclusion in their areas of expertise.

We have bipartisan concerns about a lack of focus in our economy on broader diversity initiatives, inclusion initiatives, the nature of equity in our society, he said. This should therefore concern the whole of our jurisdiction. Frankly, my fellow Democrats should consider this a big win. We didn’t have to. But talking to my members and watching these subcommittee hearings, there’s a lot to learn and there’s a lot to learn in subcommittee expertise. You can’t have this conversation separate from the rest of the policy-making.

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