Republican Rep. French Hill, chair of the House Financial Services Committee, has announced an ambitious plan to overhaul U.S. crypto regulation. His effort seeks to substitute heavy-handed actions with an open, capital-friendly array of rules that can provide prosperity and protection for the digital asset space.
The Need for Crystal Clear Rulebook
In a recent CNBC interview, Hill stressed the need for clear directives that distinguish the responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
“We’re going to pass regulatory clarity,”
He said, emphasizing a commitment to move away from rigid and arbitrary practices of the past. Hill places its support behind a regulatory landscape that protects retail investors and allows companies to utilize blockchain technology without the fear of arbitrary enforcement actions.
Reassessment of Prior Implementation Strategies
Hill has been outspoken in his criticism of ex-SEC Chair Gary Gensler’s tough regulatory approach, which he has said forced crypto companies to move to places like London, the European Union, and the Middle East. He argues that this exodus underscores the need for clear, pro-innovation regulations. Hill also said that an overreliance on enforcement has stifled market growth and deterred potential innovations.
Bipartisan Efforts for Policy Change
Demonstrating bipartisan cooperation, Hill announced a joint working group with members from both bodies of Congress. His team works on policies to enable the growth of digital assets. House Financial Services Committee or during a recent press conference, House Committee on Agriculture, Senate Banking Committee, and the Senate Committee on Agriculture will play a role in the initiative, Republican congressional leaders said. Hill added that,
“We don’t want to be behind the curve in financial technology and digital assets in the United States.”
Support from the Executive for Crypto Policy Rework
President Donald Trump has signed an executive order to establish a cryptocurrency working group in conjunction with legislative efforts. His team is charged with laying out new digital asset rules and weighing whether the U.S. should create a national cryptocurrency stockpile as part of his promise to overhaul U.S. crypto policy. The directive is also intended to ensure access to banking services for crypto companies, responding to industry fears that regulators are pressuring lenders to cut ties with crypto businesses, a point that regulators have disputed.
The Industry Reacts and What Lies Ahead
The cryptocurrency industry has welcomed the developments as measures leading to a more innovative environment. The crypto community has been cautiously optimistic about the new SEC task force, headed by Commissioner Hester Peirce, as a more constructive effort to come up with a comprehensive regulatory framework for crypto assets, as opposed to the top-down approach imposed by the previous administration that lacked the involvement of key stakeholders in the crypto ecosystem. Industry leaders are optimistic the initiatives will help shift focus away from confusion and fraud and create a more favorable environment for digital asset innovation.
These concerted efforts by both lawmakers and the executive branch mark a pivotal moment as the U.S. seeks to strike a balance between protecting investors and fostering an environment conducive to technological innovation when it comes to cryptocurrency regulation.
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Frequently Asked Questions
What does Rep. French Hill want to do about crypto regulation?
Hill’s goal: the SEC’s strict enforcement gives way to clear, investor-friendly rules—“We want innovation, but we also need to protect retail investors and crypto companies.”
What is the critique of the SEC’s approach?
According to Hill, the SEC’s crackdown drove crypto companies overseas, and its lack of clarity hampered development and investment in the U.S. digital asset industry.
How is the new crypto regulation going to be developed?
A bipartisan working group of Congress will draft policy, led by House and Senate committees that oversee financial services, banking, and agriculture.
How does President Trump fit into the crypto regulation equation?
Trump directed a working group on cryptocurrency to propose new regulations and to explore a national crypto stockpile while guarding banking access for crypto firms.
Glossary of Key Terms
Regulatory Clarity: Having clear and transparent rules that provide best practices for companies, investors, and regulators to work together and allow innovation.
SEC (Securities and Exchange Commission): The U.S. watchdog agency that regulates securities markets and has brought enforcement actions against crypto companies for alleged violations.
CFTC (Commodity Futures Trading Commission): A government agency of the United States that regulates commodity and derivatives markets, including certain cryptocurrency assets (e.g., Bitcoin and Ethereum).
Enforcement-Driven Regulation: The more aggressive regulatory approach agencies now lean towards, where penalties and lawsuits replace clear compliance directives.
Bipartisan Working Group—A: A group of lawmakers from both major political parties collaborating to craft legislation concerning cryptocurrency regulation.
Stablecoins—cryptocurrencies that are linked to traditional assets such as the U.S. dollar and aimed at limiting price fluctuations.
Digital Asset Innovation: The creation of novel blockchain-based technologies, applications, and financial instruments in the cryptocurrency space.
References
FRENCH HILL:https://hill.house.gov/news/documentsingle.aspx?DocumentID=9433
Wiley:https://www.wiley.law/alert-President-Trumps-Crypto-Czar-Outlines-Federal-Governments-New-Approach-to-Digital-Assets
