'Establish The United States As A Global Hub For Digital Innovation': French Hill Touts Crypto Bill

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During debate on the House floor, Rep. French Hill (R-AR) urged support for HR 3633, the Digital Asset Market Clarity Act.

Transcript

00:00I rise in strong support this morning of the Clarity Act.

00:04We've been here before, Mr. Speaker.

00:07Just last year, we passed landmark legislation, FIT 21, with an overwhelming bipartisan majority

00:15to apply strong federal standards to digital asset markets.

00:22For more than five years, our committee has heard from dozens and dozens of experts, held

00:28numerous roundtables and hearings with market participants of all sizes in all segments

00:35of the market to learn more about the emerging digital asset ecosystem.

00:42We learned about the value proposition and relevant risks associated with digital assets

00:48and the use of blockchain technology.

00:51We've heard time and time again from market participants and regulators about the need

00:57for clear regulatory guardrails.

01:01We've talked about the need to fill those regulatory gaps that have left millions participating

01:07in crypto markets vulnerable.

01:10In fact, Mr. Speaker, both President Biden in his Executive Order 14067 and President Trump

01:18in his Executive Order 14178 identified those market regulatory gaps, asking Congress to act

01:29to fill those gaps.

01:32And we certainly witnessed in 2022 consumer harm when the Financial Services Committee heard

01:38unprecedented testimony from an expert called in to clean up the failed digital asset crypto

01:45firm FTX and the mess it left behind.

01:50In his words, never had he seen such an utter failure in corporate controls.

01:57In its wake, then Chairwoman Waters wisely stated, we need legislative action to ensure that digital

02:05asset entities cannot operate in the shadows outside of robust federal oversight and clear rules

02:14of the road.

02:17If we needed action then, we certainly need it now, and we risk history repeating itself,

02:23and that's why we gather today on the House floor.

02:26After years of bipartisan work, numerous iterations, this bill would apply rigorous rules to digital

02:33asset firms, prohibiting commingling of customer funds, and requiring capital, record keeping,

02:41and conflict of interest mitigation standards.

02:45Importantly, the bill recognizes that decentralized finance or DeFi developers do not take custody

02:53of user assets, nor do they control user assets.

02:58Therefore, we should not treat them in the same way that we treat centralized actors who do have

03:04custody, who do have control over assets.

03:08It's important to note that in an agriculture committee hearing, the former general counsel

03:13of FTX USA himself testified, quote, had we the regulatory structure provided for in clarity

03:25applied to FTX, close quote, the story would, and he goes on to say, would be almost certainly

03:34have been a much different ending.

03:39Let's ensure that we learn from the past, Mr. Speaker, the digital asset ecosystem is

03:43evolving at a remarkable pace, enabling real-time settlement of peer-to-peer transactions, initiating

03:50a renaissance in applied cryptography, the laying the groundwork for the next generation

03:57of the use of the internet.

03:59The United States has long had the most innovative financial and technology sectors and the deepest,

04:06most liquid capital markets.

04:09But while other jurisdictions are building frameworks for the future of finance to be on-change

04:15and digitally native, our great country with those great characteristics is lagging.

04:23For too long, our digital asset regime has been the worst of both worlds.

04:28Regulation by enforcement, which has pushed good actors to leave the United States, and the

04:35regulatory gaps that I talked about identified in both President Biden and President Trump's

04:40executive orders that have left consumers unprotected from the bad actors.

04:46Now today, we have an opportunity to reverse course and establish the United States as the

04:52global hub for digital innovation.

04:58To do so, we must close the regulatory gaps with common sense rules.

05:01The Clarity Act does just that.

05:05By leveraging the expertise of our two market regulators, the Securities and Exchange Commission,

05:10and the Commodities Future Trading Commission to ensure wrap-around oversight of digital

05:16asset markets from initial sales, raising capital, to daily trading, it provides clarity

05:23for banks also engaging in this ecosystem.

05:26And as we said in the last Congress, Mr. Speaker, these rules need to be fit for purpose for

05:32the digital ecosystem.

05:35Now all of us on this House floor know that the status quo is simply unacceptable.

05:40We all know American consumers and innovators deserve this clarity, deserve better, deserve

05:47rules of the road.

05:49The choice before us is whether to lead in the financial markets of the future or watch

05:54the next FTX fail while we're left saying, once again, well, we've been here before.

06:02I urge all my colleagues to join me on both sides of the aisle and support the Clarity Act.

06:08Let's fill these regulatory gaps with the proper federal oversight.

06:12Let's create a competitive digital ecosystem.

06:16I support this bill.

06:17I urge my colleagues to, and I reserve.

06:19The gentleman in reserves, the gentlewoman from California is ready.

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Transcript

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