Rep. Patrick McHenry (R-North Carolina), House Minority Leader pro tempore and Speaker pro tempore, holds the gavel in the House of Representatives as the House prepares to vote on a new speaker at the U.S. Capitol in Washington, D.C. , October 17, 2023.
Saul Loeb | AFP | Getty Images
WASHINGTON — One of cryptocurrencies’ strongest allies in Congress is fighting this week to ensure that industry-backed regulatory legislation is included in a must-pass defense funding bill.
If he is successful, Rep. Patrick McHenry (R.N.C.)’s hard-line tactics could lead to a big win for the crypto industry. But they’re frustrating his colleagues on both sides of the aisle.
The bill aims to clarify how federal agencies regulate cryptocurrencies. It could also go a long way toward resolving a pressing question in technology policy: whether cryptocurrencies should be treated by regulators as products or securities. The answer could have implications for U.S. digital currency regulation for decades.
But McHenry’s bill has never been voted on in the House, let alone the Senate.
Instead, McHenry, chairman of the Financial Services Committee, is pushing to attach his bill to the National Defense Authorization Act, the Pentagon’s major annual funding measure.
Congressional leaders hope to pass it by the end of the year, and the House and Senate are currently working to reconcile their versions into a single package that can win enough votes to pass both chambers. .
McHenry’s cryptocurrency bill faces stiff opposition from leading Senate Democrats, including Sen. Sherrod Brown of Ohio, chairman of the Banking Committee.
“It is impossible to pass an industry-created crypto bill,” Brown told CNBC on Thursday. “It’ll probably never pass the House. It’ll probably never pass the Senate.”
But McHenry has influence. He heads the Financial Services Committee and has veto power over whether the issues it oversees make it into the final bill.
As part of his campaign to add a virtual currency bill to the defense bill, Mr. McHenry will discuss other measures lawmakers are trying to add to the bill, including addressing the fentanyl overdose crisis, according to four congressional staffers close to the negotiations. It has reportedly blocked several amendments. Discuss the background of the negotiation openly.
Frustration with the holdup is at its highest point.
But there are signs that Mr. McHenry’s efforts are losing momentum. Rep. French Hill, R-Arkansas, who is also sponsoring the cryptocurrency bill, said the bill is unlikely to be included in any legislation that passes this year.
“I don’t have high expectations for this year,” he told CNBC’s Squawk Box. “We expect to be successful in early 2024.”
Foreign investment bill
Encryption isn’t the only thing McHenry is fighting for in his defense bill. He is also blocking a bipartisan provision that would require companies to notify the government if they invest in the national security areas of adversaries such as China and Russia.
Mr. McHenry has long opposed the measure, arguing that allowing U.S. companies to invest would give them control and valuable insight into national security and foreign companies’ technological capabilities.
Sen. John Cornyn, R-Texas, who sponsored the provision with Sen. Bob Casey, D-Pennsylvania, said Congress needs to set its own standards.
In August, the White House announced: presidential order Require governments to be notified of certain foreign investments.
“Why won’t Republicans follow Biden’s executive orders instead of setting their own rules?” Cornyn said Wednesday. on X. “We need to rein in executive power.”
Rep. Mike Gallagher, R-Wis., who chairs the House Select Committee on the Chinese Communist Party, also opposes removing foreign investment legislation from the final NDAA.
“While Congress hesitates, we continue to incite our own potential destruction,” he said in a statement Thursday. “I look forward to working with colleagues on both sides of the aisle to fix this national security goal.”
In the House of Commons, the Foreign Affairs Committee on Wednesday approved a tougher version of the Foreign Investment Bill that expands the number of sectors subject to notification requirements.
