McHenry Pushes for Crypto Bill in Defense Funding Legislation
Rep. Patrick McHenry (R-N.C.), a strong advocate for the crypto industry, is working to ensure that a regulation bill supported by the industry is included in the defense funding legislation that must be passed. If successful, this move could be a significant victory for the cryptocurrency sector, although it has frustrated many of McHenry’s colleagues from both parties.
The purpose of the bill is to provide clarity on how cryptocurrencies are regulated by federal agencies and address the question of whether they should be treated as commodities or securities. The outcome of this debate will have long-term implications for U.S. digital currency regulation.
However, McHenry’s bill has not yet been voted on in the full House or Senate. To push it forward, he is attempting to attach it to the National Defense Authorization Act, which Congress hopes to pass before the end of the year.
Opposition and Leverage
Key Senate Democrats, including Sen. Sherrod Brown (Ohio), chairman of the Banking Committee, are strongly opposing McHenry’s crypto bill. Brown believes that an industry-written bill will not pass either chamber of Congress.
Despite this opposition, McHenry holds leverage as chair of the Financial Services Committee. He can veto issues within his committee’s jurisdiction from being included in the final bill. As part of his campaign to include the crypto legislation, McHenry is blocking other amendments sought by lawmakers, such as addressing the fentanyl overdose crisis.
However, signs indicate that McHenry’s efforts may be losing momentum. Rep. French Hill (R-Ark.), who has also led on crypto bills, stated that he does not anticipate the legislation being passed this year but expects success in early 2024.
Outbound Investment Bill
Besides the crypto bill, McHenry is also battling against a bipartisan provision in the defense bill. This provision would require entities to notify the government of investments made in national security sectors in adversarial countries like China or Russia.
McHenry has consistently opposed this measure, arguing that allowing U.S. companies to invest provides valuable insights into the national security and technology capabilities of foreign companies. Sen. John Cornyn (R-Texas), who sponsored the provision, believes that Congress should set its own standards rather than deferring to executive orders.
The House’s Foreign Affairs Committee recently approved an even stricter version of the outbound investment bill, expanding the sectors that trigger notification requirements.
Hot Take: The Battle Over Crypto Regulation and National Security
Rep. Patrick McHenry’s efforts to attach a crypto regulation bill to the defense funding legislation have sparked controversy and frustration among his colleagues. While he seeks to provide clarity and regulatory guidance for the cryptocurrency industry, opposition from key Senate Democrats poses a significant hurdle.
Furthermore, McHenry’s campaign has led to a delay in addressing other pressing issues, such as the fentanyl overdose crisis. The outcome of this battle will shape the future of U.S. digital currency regulation and impact national security considerations related to outbound investments.
As negotiations continue, it remains uncertain whether McHenry’s bill will ultimately be successful in passing this year or if further delays lie ahead.
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