Rep Patrick McHenry on Crypto's Big Week in DC

✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/2 This is a huge week for crypto in DC and we have on Congressman Patrick McHenry to tell us all about it. Three big things: 1) SAB 121 repeal bill going to Biden’s desk - will he let it pass or veto? 2) SEC approve/deny Ethereum ETF - decision due thursday. 3) House vote on FIT bill you’ve been championing - well talk about that bill. Stand with Crypto: https://www.standwithcrypto.org/politicians ------ 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/toku ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum https://%E2%81%A0https//bankless.cc/Arbitrum 🌐 CARTESI | APPLY FOR A GRANT https://bankless.cc/CartesiGovernance ------ TIMESTAMPS 00:00 Start 04:05 Introduction to Congressman McHenry 05:11 Crypto in DC Temp Check 07:34 Generational vs Partisan Divide 12:57 Has Biden's Crypto Sentinent Changed? 16:46 FIT 21 Act 20:10 Security vs Commodity 23:18 Startups Becoming Commodities 26:34 Why Should Congress Support? 29:22 Why Patrick Cares About Crypto 33:25 Stablecoin Legislation 35:37 Will Crypto Still Be Under Attack? 38:24 Trump vs Biden Crypto Policies 40:41 How To Get Involved ------ RESOURCES: Patrick on X: https://x.com/PatrickMcHenry ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Ryan Sean Adams?

  Bankless Nation, this is probably the biggest week for crypto in DC, the capital of the United States, probably ever. Last week was a massive victory for pro-crypto legislation. You probably heard David and I talking about this on the roll-up. Basically, it was good news. An obscure accounting rule put in place by Gary Gensler's SEC was making it so US companies couldn't even custody crypto. That rule was actually repealed. It's called the SAB 121 repeal. And as we record this episode, that repeal, that bill, is on Biden's desk. He has the option to choose whether to let it pass or to veto it. Vetoing it will mean anti-crypto. Letting it pass might mean he's pro-crypto. And this week is even more consequential because the SEC is slated to either approve

• 0:47Ryan Sean Adams?

  or deny the Ethereum ETF. That happens on Thursday, I believe. And on Wednesday, the US House of Representatives votes on probably the largest pro-crypto legislation that we've seen. It's called the FIT 21 Act, and our guest is Representative Patrick McHenry. He is one of the key champions behind this legislation, so we brought him on to tell us what it is and why he supports it. And just as a reminder, a vote yes on this bill in DC is pro-crypto. A vote no on this bill signals anti-crypto.

• 1:13David Hoffman?

  The stakes are pretty high for politicians these days because I think the whole DC sphere is finally waking up to the fact that crypto voters are actually a powerful block in a very close election. So we have potentially the power to swing elections, and we're potentially even splitting the Democratic Party right now along generational lines. That's one of the big takeaways from the SAB 121 bill. Since 2024 is shaping up to be the first big crypto election with both presidential candidates, Trump versus Biden, both have public statements aligning themselves either for or against crypto, something that I think we're going to see even more of as we approach the November election date. So let's go ahead and get right into this conversation with Congressman Patrick McHenry. But first, a moment to talk about some of these fantastic sponsors that make this show possible.

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• 4:05Ryan Sean Adams?

  Bankless Nation, we are very excited to introduce our next guest Congressman Patrick McHenry. He is the Chair of the House Financial Services Committee. He's a key supporter of FIT for the 21st Century Act. This is a bill. It's major crypto legislation that's going to Congress for vote this week. Representative McHenry, welcome to Bankless.

• 4:24Speaker 02

  Awesome to be with you. Fun to listen, but even better to be on with you.

• 4:28Ryan Sean Adams?

  Oh, it's amazing. I'm excited that you're a listener. I don't know how many listeners we have in DC, but there's more than a handful. I guess the topic of DC is first and foremost in the crypto listeners' mind this week because it feels like it's going to be a big week for crypto in DC. And I just want to remind people a few things as we get into this conversation. There's three big things that are happening this week. First of all, we got the SAB 121 repeal, which you've heard David and I talk about. That bill is going to Biden's desk. So pass Congress. The big question is, is he going to let this pass or is he going to veto? We also have the SEC approving or denying the Ethereum ETF. That's a decision that's going to happen on Thursday, hopefully. And also, we have this House vote on the FIT bill that Patrick McHenry here has been championing, and we'll

• 5:10Ryan Sean Adams?

  talk about that. And I want to begin this conversation with, I guess, a broader conversation, which is, how about crypto in DC? Like, what's the temperature on crypto in DC? Lately, we've had even the crypto, sorry, the political media institutions like Politico saying maybe this is an election issue. There's been polls released by crypto industry groups that show up to 20% of voters in key swing states identify crypto as a major issue. So the broadest of questions here to kick us off, is crypto now a 2024 election issue?

• 5:45Speaker 02

  Yes. The thing that has shifted here is that an industry that they said was dead is not dead. And once they said it was dead, it was undead. And they said it was dead again. So it's a whole wave of all this stuff. And, you know, the last time, you know, DC assumed everything was dead was after FTX blew up. And you have a lot of my colleagues that got implicated in Sam Bankman-Fried's shenanigans. I don't know the right way to say it.

• 6:22Ryan Sean Adams?

  That's a good word. We like that word.

• 6:23David Hoffman?

  That's acceptable, yeah.

• 6:24Speaker 02

  Shenanigans. That's better than using profanity, but.

• 6:29Speaker 02

  But it keeps going and you have new innovations that are built on this new technology and then people experience that because the populace asks elected officials about it. I think what we see mainly is a generational divide, less of a partisan divide in the House of Representatives. Those that have been more recently elected have been asked this question in their election process. So they had to have an answer and they had to do a little work and research if they didn't otherwise know. And those election questions make us better policymakers. The questions we get from constituents and

• 7:10Speaker 02

  from voters make us sharpen up our response to them either in the affirmative or the negative and really make us work through our arguments. So I think the fact that we actually have crypto voters, that is a powerful enabler of sound public policy and forces Washington to actually move.

• 7:34David Hoffman?

  I really want to get into this generational divide versus partisan divide because that was really revealed to us, the broader crypto community with this SAB 121 repeal. It was expected to be repealed, but I don't know if it was expected to be the vote to be that split. 6830 is a pretty strong divide with a number of key Democrats actually voting for its repeal, more or less like defecting from like the stated Biden, I will intend to veto this. And it really seems to have kind of split the Democratic Party between maybe the establishment Democrats, the Biden administration, the Liz Warren types and the younger Democrats. So what was previously the perception of the crypto industry was

• 8:16David Hoffman?

  like it was Republicans versus Democrats on crypto and it's now seems to be a different divide. Maybe you could kind of share some of your reactions to the 6038 vote and how you think this has kind of changed the game when it comes to the DCE stance towards crypto?

• 8:29Speaker 02

  Well, a couple of things. So first,

• 8:33Speaker 02

  For for folks that aren't familiar with the Congressional Review Act, right, which is like most people. The Congressional Review Act is is a law that enables Congress to come in, pass a bill through the House, the Senate, and get it signed by the President, repealing a major regulatory action. So this happened at the beginning of the Biden administration. And the beginning of the Biden administration, a Democrat House and Senate and a Democrat President repealed Trump major regulations. At the beginning of the Trump administration, they repealed major, we repealed major pieces of Obama's regulatory policy put in place last year in office. This has been rarely done.

• 9:18Speaker 02

  We use the Congressional Review Act to stop the Securities and Exchange Commission's accounting rule, which is a very precise thing. Accounting rules usually don't get congressional debate. They don't actually get debate in society because they're they're really common sense, largely driven by common sense on how you treat assets, how you protect assets in in this discussion, or how you account for assets and liabilities in the broader broader sense on accounting policy. For us to move legislation out of my committee, repealing a staff accounting bulletin out of the Securities and Exchange Commission,

• 10:00Speaker 02

  seems very particular, doesn't seem like it's a big policy. But when you explain it and the impact it has to, basically says your crypto is not protected like any other asset, commodity or securities actually are protected. You have even your car is your car title is better protected than what the Securities and Exchange Commission have put in place with a staff accounting bulletin. So number one, for us to repeal an accounting bulletin means it has to be so egregious and so dumb. Number one. Number two, to get Democrats to vote to repeal a major regulation from a Democrat.

• 10:44Speaker 02

  Or Republican versus on Republican, right? Is a major thing, especially in our current politics. We had 21 Democrats and then we had, you know, over 10 in the Senate do the same. That those are big things, huge things for Democrats to do, especially an election year for the Democrat president running for reelection. Okay. So those two things are noteworthy on this. That shows that there is more power, more interest. There's more power behind crypto voters. There's more interest among policymakers to speak to those voters' needs. Or to deal with what they think is actually an innovation or some greater societal good.

• 11:29Speaker 02

  Right? So it's either crass politics, which I'm frankly, I've been elected to 10 terms of the House. So I'm as much of a politician as anyone, maybe more so. But it's either speaking of voters' needs or seeing something and saying, no, I'm actually going to explain it to voters on why this is important. Either way, the vote total was huge, especially for something as significant as going against the president of your own party in a major regulation.

• 12:00Ryan Sean Adams?

  And why? Why was it so huge? How do you explain this? Just like, like, was it just so arbitrary and dumb, as you say, that just like all legislators, like many legislators kind of like caught wind of this and said, it doesn't make sense? Or you just say, how do you explain this outcome?

• 12:15Speaker 02

  No, it's because there's been a massive amount of work done to educate members of Congress and there's been an interest among members of Congress on being educated. And so this is a different vote than what we've got, would have gotten on crypto 10 years ago. Different vote, much wider, much more understood by policymakers that there is something good, something innovative, and you need to be for it. The specifics, okay, like, we're not going to get into, we don't need to get into specifics on every policy area, but it's a broad inclination of are you pro crypto or anti crypto? And what's the balance here? What's, what's good?

• 12:57David Hoffman?

  So Biden has said that he intends to veto this bill and he said that before we got the 68 30 vote out of the Senate. I think he has seven days to actually sign that veto. Do you think that any of his calculus has changed as a result of this vote? Or do you think that he's actually going to be in somewhat of a bind with so many Democrats signaling not being aligned with his veto?

• 13:21Speaker 02

  Well, let's see what he says about the FIT 21 bill because the staff accounting bulletin just is how institutions hold crypto. Do they hold it like you'd hold a stock or a bond in custody for someone? Or do you have to hold it on your balance sheet and hold capital against it as if it's a liability? So this is a technical thing. The president being for his own regulatory policy that came from his appointee makes sense. Let's just be honest, right? I mean, Joe Biden appointed Gary Gensler, Chair of the Securities Exchange Commission, and the Senate confirmed

• 14:05Speaker 02

  him. So you had Democrats senators that voted in favor of him to become the Chair of the Securities Exchange Commission, but you also had the president nominate him. So they can answer for that. The question now is on this larger bill on the Financial Innovation and Technology for the 21st Century Act or FIT 21 as we're calling it. This bipartisan bill we've marked up out of committee, both the House Agriculture Committee that deals with commodities and the House Financial Services Committee that deals with securities. We had bipartisan votes out of those committees, my Committee of Financial Services that I

• 14:46Speaker 02

  chair, and the House Ag Committee in July of last year. We lost a little momentum because the fall of last year is kind of nuts in the House of Representatives. And that's a separate story. I don't, we can go down that rabbit hole, but without a Speaker of the House and for me to serve as acting Speaker or Speaker pro tem, you know, for October, kind of threw off the schedule in a way that I didn't plan for.

• 15:19Speaker 02

  I personally didn't plan for any of that, but anyway, legislatively, my hope was to get this bill voted on in the fall of last year. And we'd had much more optionality of getting this signed into law, or something like this, signed into law, this Congress. But here we are in the May of the election year. I think it's more important what the president says about FIT 21 this week than whether or not he vetoes SAB 121. If he vetoes SAB 121, as we expect, but says something positive about what we've done here that will help unlock innovation here in the United States, make sure that we keep pace in regulatory policy with Europe,

• 16:02Speaker 02

  with Japan, even with Hong Kong.

• 16:07Speaker 02

  You know, that's going to be the bigger statement, I think, from the White House. And they're either going to be pro crypto or anti crypto, and they'll have to answer for it.

• 16:18Ryan Sean Adams?

  Yeah, it's just fascinating. I got to congratulate you on the impeccable timing of kicking this into May, because it's like, it's just a way better timeline to do this, because you're coming with the FIT 21 Act vote. That happens this week, I believe, in the House. And at a time where last week, we got a tremendous amount of momentum. It feels like DC has really woken up to the fact that there are crypto single-issue voters, and there's a lot of them. And they could actually swing election outcomes. And their voice needs to be heard by Congress. So it's perfect timing, I think, for lawmakers to sort of contemplate FIT. Can you tell us what it is? So the FIT 21 Act, tell us what it does for crypto.

• 17:00Ryan Sean Adams?

  Maybe first talk to the crypto listeners in our audience, who are, quite frankly, pretty fed up, Representative, with the way crypto legislation and the way the US is reacting to this industry and to the community and to average, everyday Americans who hold crypto. Sell it to us. What does this do for crypto?

• 17:21Speaker 02

  So currently, in federal law, we have no definition of what is a digital asset. So we have people that put out a white paper and pretend to be Satoshi and are fraudsters. And we have no definition of what that is. It is buyer beware. You have people that are pretending to be innovators like FTX. And they're running their whole business on a spreadsheet, like on an Excel spreadsheet with QuickBooks. I mean, so that's not the type of innovation we want. We don't want fraudsters to be able to run roughshod over this place. We want real innovation.

• 18:02Speaker 02

  So first, we have a definition under federal law of what is a digital asset for the first time. Second, we provide clarity between the Securities and Exchange Commission and the Commodities Futures Trading Commission on who regulates what.

• 18:20Speaker 02

  We have securities and we have commodities. Those are defined in federal law. And then according to this act and point one, we have a definition of a digital asset. So if you're a digital asset and you are truly decentralized, you're a commodity.

• 18:36Speaker 02

  And if you're not decentralized, then you're probably a security. And that's the clarity we need because the SEC is fighting with the CFTC. And when the kids are fighting, Congress, the parent, has to step in and say, you get this responsibility. You get that responsibility. And here are the clear dividing lines. This is what the Europeans have done with MICA on giving a definition. It's what they've done in the UK. It's what they've done in Hong Kong. It's what they've done in Singapore. It's what they've done in Japan. Provide clarity of what it is and how you exchange it, how you buy it, how you sell it. What are your property rights for the asset? And that's what we provide in this law. So point one is a definition.

• 19:19Speaker 02

  Point two is the definition is who controls the means of exchange, the SEC or the CFTC? And then we get into all the particulars of the property right and the exchange. So we don't just say to the CFTC and the SEC, have at it. We specify to them that this is a new, unique, definitive thing that needs to be treated as a unique thing under regulation. And so we prescribe that with both the SEC and the CFTC. It's clarity. I mean, that is clarity. So you don't have the Securities

• 19:58Speaker 02

  Exchange Commission under Gary Gensler running roughshod over innovators that are truly trying to comply with the law, but have found themselves a foul of the Gensler regime to SEC.

• 20:11Ryan Sean Adams?

  So can we test that? Let's say FIT21 was in place, right? It does seem like there is maybe some, certainly some ambiguity at the SEC with respect to crypto asset network Ethereum, as to whether it's a security or not, right? There's some ambiguity there. The CFTC, it seems like, has been clear that it is a commodity. We really don't know what the SEC thinks about Ethereum. And if FIT21 was in place, would we know by default? Like, does something like Ethereum clearly pass the test of true decentralization? Or how would that be? How would that work in a use case?

• 20:45Speaker 02

  It does. Ethereum would clearly pass the decentralization test that we have in this act. And we've put, you know, there are a number of assets we've put through this test to see where it would fall out. But Ethereum clearly meets that mark and would be a digital commodity, just like Bitcoin is a digital commodity. These things are truly decentralized. You don't have a narrow group dictating how the whole, you don't have a narrow group having a disproportionate share of the economics and the voting control over Ethereum, therefore be decentralized. And we have a decentralization test that

• 21:29Speaker 02

  we've refined and refined and refined with a lot of feedback. And a couple of my colleagues, French Hill from Arkansas is the lead on FIT21 for House Republicans. He's the Chair of the Digital Asset Subcommittee on my committee. His vice chair is Warren Davidson of Ohio. You know, Warren, and he's a, you know, very early on in this space. And Tom Emmer, who's the House Republican WEP, still very, very early on, just like Warren. And the digital asset space and we they have worked and worked to refine what is this decentralization

• 22:08Speaker 02

  test. So you don't have the SEC taking powers that they should not have like they're currently doing. And a clear test, a very clear bright line test that puts people that allows innovators to clearly see where they will fall if they make certain decisions. And the fact is, you have you have, you know, you have you have assets that are clearly digital commodities today. And you have assets that are clearly securities and are wrapped in securities fraud today. Right? Now, the SEC doesn't police those because they usually can't find the bad actors or don't know

• 22:53Speaker 02

  how to, or they're not going to get the big news pop for getting getting these bad actors. They'd rather go after the the folks that are either in the public markets or raise lots of money or are dominant players in the press. And so, you know, we provide this clarity. And I think it's really important that bright line test.

• 23:18David Hoffman?

  In the current state of things, there's a catch 22 about teams who are trying to bootstrap a project, bootstrap a token, bootstrap a network that and the the vision of this team is to have a fully decentralized network in the fullness of time. But in the beginnings of this lifecycle of project startup development, it's very centralized and very like insider controlled. That's how all things start in the world of startups. And so they would like very likely be classified as a security. But yet this classification also prevents them from decentralizing their network because they cannot become a commodity. So there's like this self self terminating process that the ambiguity of the SEC has like not fixed and actually kind of created.

• 24:01David Hoffman?

  Is there is there clarity? Is there path for startups to actually move towards the decentralized end of the spectrum and become a commodity in the FIT 21 bill?

• 24:10Speaker 02

  Yes, that was the very scenario that we went through. So imagine you take no outside capital. Well, a whole section of the provisions of this bill will affect you. Because you're not raising money with a securities offering.

• 24:29Speaker 02

  And so bootstrapping and that version of it, there is a clear process by which you go through the funnel and you come out a digital asset, a digital commodity with that regulatory scheme for a digital commodity. Whip Emmer, Tom Emmer, spent a lot of time working on that very subject and was very, was really concerned and appropriately so that the SEC would never let you check out, right? Hotel California idea, right? You can check out, but you can never leave. And so we've, we've gone through and tighten up that language to make it clear

• 25:12Speaker 02

  that, you know, that very circumstance bootstrap team and, and how are they treated? How are they treated in that, in that decentralization process? Because decentralization and decentralization, it's a, it's a broad spectrum, right? I don't know that everyone's going to be able to achieve Bitcoin decentralization because how widely it's held, how large that market is, and how resilient, by the way, that market is, that would be kind of the, the, the gold standard, if you will.

• 25:51Ryan Sean Adams?

  Nice.

• 25:54Speaker 02

  Nice. That was lame. So, but, but that's where you want to achieve, that's where you want to go for decentralization. That's kind of the, the, the dream. And so, which you shoot for. But in the very beginning, you have an idea, you have code, and you have a handful of insiders. And then how do you get from that handful of insiders into, you know, the wide, large scale holdings? We deal with all of that in the structure of this bill.

• 26:23Ryan Sean Adams?

  Okay, now.

• 26:24Speaker 02

  Why it's so complex and why it takes so long because you want to make sure you get it right. And you get it right for not the next five years, but for the next 30 years.

• 26:33Ryan Sean Adams?

  So there's clearly some wins for the crypto community, for crypto natives, for crypto holders here. Talk about fellow, your fellow legislators. So, so sell it to them now, right? So why should Congress support this? You know, somebody like, let's say Democratic Minority Lead, Hakeem Jeffries, like where does he stand on this? Why should someone like that support this bill?

• 26:52Speaker 02

  Number one, consumer protection. You saw with the FTX failure.

• 26:59Speaker 02

  And a bunch of frauds in this space that you have bad actors that are going unpoliced. You have so you have a massive amount of consumer harm.

• 27:13Speaker 02

  Number one. Number two, you don't have clarity for innovators. So you have folks that want to create a project here, a technology project here in the United States, and they're choosing to go to the UK. They're choosing to go to Singapore. They're choosing to go to mainland Europe to to innovate, right? And you're both laughing because it's absurd, right?

• 27:40Speaker 02

  That's not where you go for innovation. That's where innovation goes to die.

• 27:46Speaker 02

  So so number one, consumer protection. Number two, innovation. Number three.

• 27:55Speaker 02

  Well, I think number one, number two are the dominant things. Number three, we have an obligation to to clarify what goes to what agency. And this is what we're doing in stepping in and providing clarity. So on a very basic level, this is what Congress is supposed to do is clear things up, make things clear for the populace. And then number that's number three. Number four is a little more political. Look around. Do you want to be on the side of innovation? Do you want to be on the side of innovation? Or do you want to be on the side of the of the progressive, the loud progressive folks that are anti crypto?

• 28:38Speaker 02

  But frankly, they're they were anti they've been anti anti anti everything. And they've been very loud on the progressive left. And now they're seeing that crypto is is is their political ticket to relevance, like the big bank failures were in in, you know, in the global financial crisis of 2008, 2009. It's not. And and these voters are by and large,

• 29:12Speaker 02

  crypto voters are by and large left of center, except except they're finding themselves being solely focused on one issue, which puts them into play.

• 29:23Ryan Sean Adams?

  Yeah, I think they are in play. I've talked to a lot of independents and like generally left-leaning folks that are in crypto who are just like, I can't believe what some of the establishment Democrats, their policy on this. And if they don't change, it's going to actually change my vote. I want to ask you a personal question because I know you've been involved in crypto for quite a long time. You've been working on Fit for a while. Why are you so personally involved in crypto? Like, why do you, why do you care so much about this? Why is it important to you?

• 29:51Speaker 02

  So, because I saw how my, well, the origin of this is a pretty basic one, which is I saw how my dad grew his small business in our backyard. You're like, what does that have to do with crypto? You know, my dad didn't go to business school. And he told me, he's like, I didn't go to business school, so I had to go figure out how to be an entrepreneur. He wasn't going to make his way in corporate life. So he decided to try different things and start small businesses and eventually found one that was successful. So I saw

• 30:27Speaker 02

  what he was doing outside in small-town America. And I've always looked for ways to unlock financial opportunities for people like my dad. Whether it makes it a little bit easier for you to get a loan so you can start a small business, whether it's a little bit easier to get investment capital, more, you know, more cheaply get access investment capital, whether it's investment crowdfunding, which I championed in the Jobs Act in 2012, that got signed along in 2012. That was a major motivation in seeing what my dad went through. And so the motivation out of my dad's story took me to crowdfunding.

• 31:14Speaker 02

  And from crowdfunding, crypto became the enablement of connecting people with their economic consequences of their action and making it cheaper, faster, better. So I see that huge economic opportunity unlocked when you actually can more affordably connect with the economy. And that's what crypto is doing, bringing down the cost structure. This has the potential to bring down the cost structure of all the world of finance based off of an architectural change of a network that cannot be done with centralized

• 31:58Speaker 02

  properties right now. And bringing that cost structure down helps people that are on the margins or trying to go up, you know, up the economic food chain and go from lower middle class to middle class to upper middle class. And that's the mind's eye that I've got on innovation, on unlocking the world of finance. And that is a long version to tell you a very simple, simple, simple answer, which is enabling, you know, folks in small towns, rural America's, rural America to better connect with our economy. Crypto is

• 32:39Speaker 02

  the best way to do it, has the best opportunity to unlock all this centralized goods that have come out of Web 2 to get to Web 3, where we're all going to get, where we all have the opportunity to have the economic upside of this economic activity.

• 32:58Ryan Sean Adams?

  Well said. So FIT is going in front of the House. I believe on Wednesday, there'll be some debate. And, you know, I guess I would say to Bankless listeners, this is the clearest mark I've ever seen on, it's like an acid test for whether you're representative or like the politicians, whether Congress is pro crypto or anti crypto, similar to the Sab test, but even the Sab bill, but even more so. So watch what the politicians do with this one. I think it'll be particularly noteworthy. Representative McHenry, there's some other legislation that we need, some more clarity that crypto needs. I want to ask you briefly about stablecoin legislation. Is something around that coming? Like, what can we hope for there? Because that is just as ambiguous as, you know, securities versus commodities in this space.

• 33:41Speaker 02

  It is. And look, Maxine Waters, who's the ranking member of the House Financial Services Committee, she and I have been negotiating for 23 months about on legislation to provide for a federal regulation of a stablecoin. Right now, New York and Wyoming are the only two states really in action now. Nebraska has a regime. Few other states are trying to put together things like California. But New York is really the actor here for stablecoins. We need to have a federal stablecoin, payment stablecoin regime. The finer points

• 34:21Speaker 02

  of this really matter because it, you know, this, that, that and that on-ramp can, can either open up the aperture or close it off, you know, with federal regulators putting a thumb on the scales. So we got to make sure that the federal regime is tightly constructed, is narrowly constructed. So you don't have the Federal Reserve looking at this as the world of crypto as competition. You don't have the Treasury Department think that everything is illicit finance and therefore can, therefore can cut it off. And so we want to make sure

• 35:04Speaker 02

  there are proper protections for a stablecoin regime. That has been my concern with, with the negotiations that we've had so far. And I want to make sure that language is appropriately tight so that we actually protect innovation and have a viable, strong on-ramp that is accessible to folks. But we don't want to go too far where, where federal regulators can get out of hand. So I'm interested in getting this done, but it is, it's just taken a lot of time to make sure we craft the right, right legislation.

• 35:37Ryan Sean Adams?

  One other thing before we move to close, this is still maybe tactical. It feels very much like the crypto industry and like startups and like even consumer products are under assault. So the SEC now has lawsuits against five major US crypto companies that are completely legitimate. This is not, we're not talking about FTX, which like nothing happened with that. We're talking about Coinbase, we're talking about Kraken, we're talking about Uniswap, we're talking about ConsenSys, we're talking about, just in the last two weeks, Robinhood as well. Is there anything we can do with respect to that? Like, it feels like our homegrown US companies are under assault by our very regulators that we're supposed to foster innovation. Does the FIT 21, does that solve this?

• 36:20Ryan Sean Adams?

  Or how do we bring a solution to play for this?

• 36:23Speaker 02

  Well, it's directionally, it's the opposite direction that the Securities and Exchange Commission is going. We're providing clarity, they're providing ambiguity. They're going after companies that went public in the last three, four, or five years under the Securities and Exchange Commission's requirements. And now the SEC is going after their business practices that they accepted in their offerings to the public. So, you know, we've got to have a check on the Securities and Exchange Commission, and we have to have clarity. FIT 21 is the way to do that. The ballot box is the way to do that.

• 37:08Speaker 02

  Crypto voters making their voices heard to members of the House and the Senate and saying that their votes, their votes at the ballot box are going to be impacted by how these members of Congress treat digital assets and crypto broadly. I think that is the powerful voice. Our system gets it right. Our governmental system gets it right over time. In the short run, we do many things wrong as Americans, but over the long term, we get it right. The reason why we get it right is elections have consequences.

• 37:48Speaker 02

  Society moves forward and the people's needs are voters, sorry, the elected officials are responsive to the people's needs over time because of elections. Those things are powerful. We've got to make sure that we, we, we speak clearly with our voice and we tell the elected officials what we want, what we expect, and then we hold them accountable if they, if they, if they don't, if they don't follow what we request or if they do.

• 38:23David Hoffman?

  Speaking of the election, this 2024 election, I think, is going to be the most relevant to crypto that there's ever been. Both presidential candidates have indicated their alignment towards the crypto industry or not. Biden with his statement to veto, Sab 121. Donald Trump, as a reaction to that statement to veto, has more or less said that I am the pro crypto president because look at what Biden is doing. There's a conversation in the crypto industry of people expressing skepticism of Donald Trump's commitment to crypto, simply because it's free real estate for him. Like crypto, single issue voters are seeing what Biden is, is putting out there and looking at Donald Trump and saying, well, he's being friendly to us, but other people are skeptical that Donald Trump is actually planning on any following through on any sort of commitment

• 39:08David Hoffman?

  to the crypto industry. I'm wondering if you have any just like thoughts or reflections as to like what the actual like stakes are for both Biden and, and Donald Trump as it comes to the 2024 election and whether you have any sort of indication of the credible statements from Donald Trump here?

• 39:25Speaker 02

  Well, let's see what they say about this bill. Let's, let's see what they say about fit 21. Number one. Number two, you have to have a policy behind words.

• 39:39Speaker 02

  President Biden issued an executive order that was broadly, I would say, a little inclined towards crypto. That's how I took it when he did it. And now that I've produced legislation out of my committee responsive to that executive order, he's nowhere to be found.

• 40:02Speaker 02

  So let's see how he responds. And, and I want them both to be forfeit 21, right? And then I want this left up to crypto voters on who you believe and who who's going to carry out the policy set that the voters want. But I'm interested in what they're going to do.

• 40:25Speaker 02

  You can hold people accountable in the election process. They've got to put more oomph behind their words. They've got to put policy behind their words and who they're going to appoint to these important agencies because that'll send a clear sign on whether or not you're pro or anti crypto.

• 40:41Ryan Sean Adams?

  This has been great. So thank you, Representative McHenry, for hanging with us today and educating us on fit. I guess the last question as we close here is, you mentioned a few times that voters should should get their voices heard. How do they do that? Like, what do we do? Is it like tweets? Is it like phone call? Are we doing anything on Twitter? I don't even know sometimes. Should we show up in person and ask questions? Like, what is the most effective way for the single issue crypto voter to get their voice heard?

• 41:07Speaker 02

  That's a great question. You know, look, phone calls matter.

• 41:15Speaker 02

  Yes, tweeting matters. I see the action online. But we've got a lot of folks saying that these are, you know, these are, yes, they're digital warriors. They're going to be out there tweeting and to their 52 followers on Twitter or on X, right? You know, I mean, or whatever they're going to do. Or they're going to post a mean picture on Instagram. I don't know. But phone calls matter in my office. Yes, we get lots of emails. We get lots of letters still. But phone calls matter. And, and, you know, when they call and they're from my district, it makes

• 41:58Speaker 02

  it, it does make a huge impact to know that my voters care about the actions I'm taking.

• 42:04Ryan Sean Adams?

  Well, perfect. Let's end it there. And I'll leave Bankless, the Bankless community who are crypto advocates with an action item. If you want to hear what your politician, if you want to look up what your politician thinks about crypto, your local representative, you can go to standwithcrypto.org and go search by the politicians. I will note Representative McHenry here, he gets an A on that website. We've mentioned some other politicians, Maxine Waters, for instance, she gets an F right now. But there is a vast swath of undecided representatives here, and that is the bulk of them. So Hakeem Jeffries, who we mentioned is the Democratic Minority Lead, it's still undecided. So we don't really know. And that is the territory for which we need to fight for. Representative McHenry, best of luck on the Fit bill. It's been a pleasure to have you. Thank you so much. Thanks. Thanks for having me. Take care.

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