New House Subcommittee to Prioritize Crypto Oversight | Latham & Watkins LLP

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The Financial Services Committee seeks to bring some order to an industry that many believe has suffered from a lack of proper regulation.

On January 12, 2023, new House Financial Services Committee Chairman Patrick McHenry established a new subcommittee on digital assets, fintech, and inclusion. Rep. French Hill will chair the subcommittee, while Rep. Warren Davidson will serve as vice-chair.

According to Representative McHenry, the subcommittee:

provide federal regulators with clear rules for the digital asset ecosystem; develop policies that promote fintech to reach underserved communities; and identify best practices and policies to strengthen diversity and inclusion in the digital asset ecosystem.

The subcommittee will also likely hold exploratory hearings with industry delegates and play a critical role in crafting legislation where gaps exist.

Representatives McHenry, Hill and Davidson led lawmakers’ efforts to seek clearer oversight of fintech and the digital asset industry. Ongoing concerns include safeguards for stablecoins, the development of a possible central bank digital currency (CBDC), and jurisdictional friction between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). . The creation of a new crypto subcommittee signals Congress’ serious attempt to bring the digital asset industry in line with traditional oversight of financial institutions. (The powerful House Financial Services Committee has jurisdiction over matters related to the U.S. economy, banking, housing, insurance, securities, and stock exchanges.) The subcommittee, alongside other sources of regulatory momentum, could therefore lead to much-needed operational clarity. for the struggling crypto industry.

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