Last month, Rep. French Hill, who chairs the House Financial Services Committee, told CoinDesk that he expected the Clarity Act to secure bipartisan consensus, that tokenization was the next big agenda item, and that crypto would continue to receive bipartisan support.
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The narrative
After stablecoins and market structure, tokenization is the next big focus for the House Financial Services Committee, Chairman French Hill told CoinDesk last month.
Why it matters
The House Financial Services Committee is one of the few groups in Congress with direct oversight of federal regulators working on digital asset policy. It played a key role in advancing both the stablecoin-focused GENIUS Act and the market structure-focused Clarity Act. Hill has chaired the committee since former chairman Patrick McHenry retired from Congress.
To break it down
The House of Representatives found a way to get 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 got 78 Democratic votes in the House last year,” he said. “So I don’t see any reason why they can’t find consensus in the Senate on the House bill.”
Hill spoke to CoinDesk at the Digital Assets and Emerging Tech Policy Summit hosted by Vanderbilt University and the Blockchain Association in early April about a number of issues his committee is investigating.
He said the Senate counterpart to the House bill had begun to adopt some of the House version’s details as lawmakers negotiated aspects of the legislation ahead of this month’s Senate Banking Committee markup.
“I think the Senate relied quite a bit on the work of the House on both FIT21 [the Financial Innovation and Technology for the 21st Century Act] from the previous Congress and clarity in this Congress,” he said in April. “I think you see that quite clearly in the Senate agriculture markup, I think you see that in the basic draft of many of the components of the Senate bill.”
Senate negotiators have kept their House colleagues “informed of the process,” he said, adding that both he and Rep. Bryan Steil, who chairs the House Subcommittee on Digital Assets, Financial Technology and Artificial Intelligence, has been in contact with senators working on the Clarity Act.
His committee is now looking at other issues, like 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 aimed at helping lawmakers consider what the Securities and Exchange Commission (SEC) and banking regulators might need in the way of additional authorities or regulations to facilitate companies that engage in tokenization of real-world assets.
Part of that effort is determining whether there needs to be a legislative effort at all, or whether policymaking could remain at the regulator level, he said.
“Tokenization of an asset, such as a common stock, is really an exercise in changing systems,” he said. “It doesn’t change the law. Any statutory or regulatory requirements for common stock also apply to a common stock ticker, right? And so, in our view, that’s why these hearings raise awareness among members.”
The House and Senate, as overseers of the regulatory agencies, could, for example, use hearings to ask how existing systems can be adopted for blockchain-based systems, he said.
Similarly, Hill said he was looking at the possible tokenization of deposits in the commercial banking industry, which could enable direct debit without the need for an intermediate stop.
This is not necessarily imminent, but it is an area that his committee can explore, he said.
“You think about going from call-out markets to paper-based markets to digitizing the paper-based system that happened in the 1970s and 1980s, and that’s increased accuracy, reduced fraud, increased speed, decreased the need for liquidity [and] improved settlement,” he said. “We went from T+5 on stocks in the 1970s to T+1. So for me this is an operational decision and the interoperability of it is the biggest challenge, not the mechanical, technical aspect of doing it.”
Tokenized markets will therefore require work on interoperability and compliance, he said.
“We’re figuring out if there should be some, you know, legislative activity versus pure regulation, and that’s good. That’s what Congress’s job is,” he said.
The other big issue he’s tracking — at least in the crypto world — is efforts to update tax rules 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 crypto taxes earlier this month.
And of course there will be an election later this year that will determine control of the House of Representatives and the Senate. The crypto industry, as it was in 2024, is heavily engaged in primary races that are trying to boost candidates that the various political action committees see as friendly to crypto.
Hill said the Financial Services Committee in particular has long been engaged in digital assets, citing work by former Rep. Patrick McHenry and his Democratic counterpart, Rep. Maxine Waters, over the past 10 years.
“In the last four years, we’ve seen the digital assets ecosystem really engage, not just on political points, but politically,” Hill said. “And you saw that in the 2024 election… So I expect the ecosystem of digital assets, political activity to 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 bipartisan appetite for crypto.
“If we are successful with GENIUS rulemaking and we are successful in passing Clarity, you will begin about a 12-month joint rulemaking process between the CFTC and the SEC,” Hill said. “And I really think the political attention will track back to the regulatory agencies to try to make sure that our vision in the House of an integrated, common approach to purpose is absolutely implemented.”
Thursday
- 14:00 UTC (10:00 ET) The House Financial Services Committee holds an oversight hearing with federal banking regulators.
If you have thoughts or questions about what I’ll be discussing next week or any feedback you’d like to share, feel free to email me at [email protected] or find me at Bluesky @nikhileshde.bsky.social.
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See you next week!
