Welcome to State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. I’m your host, Nikhilesh De. Congressman Andy Barr (R-Ky.) is one of the lawmakers running to succeed U.S. House Financial Services Committee Chair Patrick McHenry (R-N.C.) as the head of the Republican wing of the committee, which oversees regulators like the Securities and Exchange Commission and is responsible for shepherding legislation that might affect the U.S. capital markets and banking sectors, among others. He shared some of his thoughts on what his crypto priorities might be during an aside at the Flyover Fintech conference on Monday.
PS: I'll be in Washington, D.C., this week for part of Wednesday, all day Thursday (at the DC Privacy Summit) and some of Friday. Let's catch up if you're around. |
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Rep. Andy Barr (Nikhilesh De/CoinDesk) |
Rep. Patrick McHenry (R-N.C.) is retiring at the end of this congressional term. A number of lawmakers are vying to take up his role as the leader of the U.S. House Financial Services Committee, including Rep. Andy Barr (R-N.C.), who spoke briefly at the Flyover Fintech conference hosted by Rep. Mike Flood (R-Neb.) in Lincoln, Nebraska, on Monday.
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A number of crypto priorities depend on the Financial Services Committee. Stablecoin legislation, market structure bills, even an industry-sought overturning of Securities and Exchange Commission guidance needs to work through the committee. The Republican leader of the committee may also need to work with Rep. Maxine Waters (D-Calif.), the head of the Democrats on the committee, in the event her party takes control of the House or for any other reason requiring bipartisan support. Barr laid out some of his views during a lunchtime speech and brief Q&A, but shared more of his crypto-specific views afterward.
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Rep. Barr spoke to roughly 300 audience members during the lunch break at Flyover Fintech, laying out his view for restoring the American Dream. Barr is one of several Republican lawmakers hoping to secure leadership of his party's wing in the Financial Services Committee next year after current Chair McHenry retires from Congress.
In an interview with CoinDesk after his public remarks, Barr said he was laying out his positions ahead of next month's leadership elections in the Republican caucus.
"I'm just doing the best I can to cast a vision, educate my colleagues about what that vision is, but also listen to my colleagues about what they want in leadership in the House Financial Services Committee," Barr said.
The House GOP will vote on its leadership shortly after next month's election, including the whip and leader. The lawmakers would then appoint a steering committee, and only after that would committee chairs (or ranking members, if Democrats retake the House) be chosen.
If he is chosen to lead, Barr said the Financial Innovation and Technology for the 21st Century Act would be on his agenda, when asked what crypto-specific initiatives he may focus on.
"If we are unable to get FIT21 across the finish line through the year-end vehicles, which are the NDAA [National Defense Authorization Act] and the omnibus [spending bill], then we need to be persistent and we need to redouble our efforts and reintroduce in the next Congress," he said.
In the event the bill does fall to the next Congress, Barr said it would be an opportunity to revise it, though he said he didn't "have many suggested changes."
"I think they've done a marvelous job," he said, referring to Reps. McHenry, French Hill (R-Ark.) and Dusty Johnson (R-S.D.).
"And if the reason why it fails in the lame duck is that we didn't do a good enough job getting enough Democrats on board, then it gives us an opportunity to maybe see what we can do to get the job done," he said. "We shouldn't let the perfect be the enemy of the good, right?"
Barr also said it was "disappointing" that Congress wasn't able to override President Joe Biden's veto of an effort to overturn Securities and Exchange Commission Staff Accounting Bulletin 121, a controversial custody rule that crypto advocates argue blocks most financial institutions from providing custody services to the sector.
"We need to create a pathway for regulated financial institutions, banks [and] non-banks, to safely custody digital assets," he said.
I also spoke with Rep. Flood after the day's events wrapped, more specifically about legislation. The lawmaker noted that Rep. McHenry "is well-regarded," and people were still working to find a way and have FIT21 passed into law during the forthcoming lame duck session (the time between Election Day in two weeks and when new members of Congress take their seat in January.)
"I still remain hopeful we can at least get FIT done," he said. Stablecoin legislation will wait until next year, and if FIT21 doesn't pass in 2024, it will also pass in 2025, Flood emphasized.
"We have serious people working in financial innovation that can create a lot of jobs, generate wealth, cement America even more as the world's financial juggernaut," he said. "But there are pitfalls, and there are things to watch out for, and regulators and lawmakers need to make sure we're building a foundation, but not an overly prescriptive set of rules. So I think it's hard to sit here and not get excited about some of the innovation that's happening, but at the same time, how are we going to regulate it? How are we going to ensure that the innovation survives our regulations?" |
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| In the U.S., Congress is out of session and we're just two weeks away from Election Day. |
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| (U.S. SEC) The U.S. Securities and Exchange Commission published its annual list of examination priorities on Monday. While much of its crypto detail resembles previous years' lists, the 2025 file did not include a line about the Division of Examinations considering "whether advisers are complying with the custody requirements under the Advisers Act." The SEC previously proposed a custody rule but it's reviewing that proposal. Adding to the uncertainty is the fact we're a few weeks out from an election which may shake up the regulator. (H/t Jesse Hamilton) (U.S. SEC) The U.S. Securities and Exchange Commission shared a bit more detail about its forthcoming appeal in its case against Ripple. An addendum to its Form C filing said it was appealing, "Whether the district court erroneously granted partial summary judgment in favor of defendants with respect to Ripple’s offers and sales of XRP on digital asset trading platforms (and Garlinghouse’s and Larsen’s aiding and abetting of those offers and sales), Garlinghouse’s and Larsen’s personal offers and sales of XRP, and Ripple’s distributions of XRP in exchange for consideration other than cash. These issues are to be reviewed de novo." I also just wanted to note that, despite a lot of X (formerly Twitter) chatter about the SEC missing its two-week deadline to file on Oct. 16, the appeals court docket opened on Oct. 3, 2024, on PACER, a day after the regulator alerted the district court it was filing a notice of appeal. (The Atlantic) Speaking of online misinformation, this Atlantic piece by Charlie Warzel is interesting, but was wildly misconstrued on social media platforms like the former bird site – ironically highlighting the point of this article (which, to be clear, does not call for government entities to regulate online speech). (Open Secrets) Elon Musk, who's endorsed Republican presidential nominee Donald Trump, helped fund a group that in turn created a fake website and initiative purporting to support Democratic presidential nominee Kamala Harris. That entity, called Progress 2028, is sending around text messages and flyers claiming to outline Harris' policies – but, per Open Secrets, these "highlight disproven and misleading claims." Anecdotally, I know someone who reacted to one such scheme exactly the way this campaign appears to hope for. (The Wall Street Journal) Four accounts on Polymarket dramatically shifted Donald Trump's odds of victory on the prediction market site with $30 million. (The Verge) The U.S. Federal Trade Commission adopted a final rule "requiring businesses to make canceling a subscription as easy as signing up." |
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If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Twitter @nikhileshde. You can also join the group conversation on Telegram. See y’all next week! |
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