Last month, Rep. French Hill, who chairs the House Financial Services Committee, told CoinDesk that he hoped the Clarity Act would ensure bipartisan consensus, that tokenization was the next major agenda item, and that cryptocurrencies would continue to receive bipartisan support.
You’re reading State of Crypto, a CoinDesk newsletter that discusses the intersection of cryptocurrency and government. Click here to register for future editions.
the narrative
After stablecoins and market structure, tokenization is the next major focus for the House Financial Services Committee, Chairman French Hill told CoinDesk last month.
Why is it important
The House Financial Services Committee is one of the few groups in Congress with direct oversight of federal regulators working on digital asset policy. He played a key role in advancing both the GENIUS Act focused on stablecoins and the Clarity Act focused on market structure. Hill has led the committee since former Chairman Patrick McHenry retired from Congress.
breaking it
The House of Representatives found a way to reach bipartisan agreement on stablecoin sales practices, decentralized finance and ethics rules before passing its version of the Clarity Act, Hill said.
“These are all things we successfully addressed in the House bill and we got 78 Democratic votes in the House last year,” he said. “So I don’t see any reason why they couldn’t find consensus in the Senate on the House bill.”
Hill spoke with CoinDesk at the Digital Assets and Emerging Technologies Policy Summit hosted by Vanderbilt University and the Blockchain Association in early April about a variety of issues his committee is examining.
He said the Senate counterpart to the House bill had begun to adopt some of the details of the House version as lawmakers negotiated aspects of the legislation ahead of this month’s Senate Banking Committee meeting.
“I think the Senate relied a lot on the work of the House both in FIT21 [the Financial Innovation and Technology for the 21st Century Act] from the last Congress and clarity in this Congress,” he said in April. “I think you see that pretty clearly in the Senate Agriculture markup, I think you see it in the basic draft of many of the components of the Senate bill.”
Senate negotiators have kept their House counterparts “informed about the process,” he said, adding that both he and Rep. Bryan Steil, who chairs the House Digital Assets, Financial Technology and Artificial Intelligence Subcommittee, have been in contact with senators working on the Clarity Act.
His committee is now looking at other issues, such as tokenization and the role of lawmakers in that area, he said. The Financial Services Committee held a hearing on tokenization in late March, which Hill said was intended to help lawmakers consider what the Securities and Exchange Commission (SEC) and banking regulators might need in terms of additional authorities or rules to make it easier for companies to engage in the tokenization of real-world assets.
Part of this effort is determining whether a legislative effort is necessary or whether policymaking could remain at the regulatory level, he said.
“Tokenizing an asset, like a common stock, is really a systems change exercise,” he said. “This is not about changing the law. Every legal or regulatory requirement on common stock also applies to a common stock listing, right? And, in our view, that’s why these hearings raise members’ consciences.”
The House and Senate, as overseers of regulatory agencies, can, for example, use the hearings to ask how existing systems can be adopted to blockchain-based systems, he said.
Similarly, Hill said he was looking at the potential tokenization of deposits in the commercial banking industry, which could allow direct debit payments without the need for an intermediary stop.
This is not necessarily imminent, but it is an area his committee can explore, he said.
“You’re thinking about moving from call markets to paper markets and the digitization of that paper system, which took place in the 1970s and 1980s, and that means greater accuracy, reduced fraud, greater speed and less need for liquidity. [and] better liquidation,” he said. “We went from T+5 in stocks in the 1970s to T+1. “So, to me, this is an operational decision, and its interoperability is the biggest challenge, not the mechanical and technical aspect of doing it.”
Tokenized marketplaces will therefore need to work on interoperability and compliance, he said.
“We’ll find out if there needs to be some legislative versus purely regulatory activity, and that’s good. That’s the job of Congress,” he said.
The other major issue he’s tracking, at least in the cryptocurrency world, is the effort to update tax regulations around digital assets, he said. The House Ways and Means Committee is already working on tax issues, and a bipartisan group of lawmakers reintroduced a bill specifically targeting cryptocurrency taxes earlier this month.
And, of course, there will be elections later this year that will determine control of the House of Representatives and the Senate. The cryptocurrency industry, as it was in 2024, is heavily involved in the primary elections, trying to bolster candidates the various political action committees consider cryptocurrency-friendly.
Hill said the Financial Services Committee in particular has long been involved in digital assets, referencing the work of former Rep. Patrick McHenry and his Democratic counterpart, Rep. Maxine Waters, over the past 10 years.
“Over the last four years, we’ve seen the digital asset ecosystem really get involved, not just on political points, but also politically,” Hill said. “And you saw that in the 2024 election… So I anticipate that the digital asset ecosystem and political activity will be important for the 2026 election. It’s bipartisan. It supports people who are pro-innovation.”
Hill said the industry’s political engagement in this year’s vote is important and that there is already a bipartisan appetite for cryptocurrencies.
“If we are successful in the GENIUS rulemaking and are able to approve Clarity, it will begin an approximately 12-month joint rulemaking process between the CFTC and the SEC,” Hill said. “And I really think the political attention will return to the regulatory agencies to try to ensure that our vision in the House of an integrated, common, fit-for-purpose approach is absolutely implemented.”
Thursday
- 14:00 UTC (10 am ET) The House Financial Services Committee will hold an oversight hearing with federal banking regulators.
If you have any ideas or questions about what I should discuss next week or any other feedback you would like to share, feel free to email me at [email protected] or find me on Bluesky @nikhileshde.bsky.social.
You can also join the group conversation on Telegram.
See you next week!
