Last month, Rep. French Hill, Chairman of the House Financial Services Committee, shared with CoinDesk that he anticipated the Clarity Act would gain support from both major political parties. He also stated that tokenizing assets would be the next big policy focus and that the cryptocurrency sector would keep receiving bipartisan backing.
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The Story
Following stablecoin regulation and market framework debates, the next major priority for the House Financial Services Committee is how to handle tokenized assets, Rep. French Hill, the committee’s chairman, explained to CoinDesk last month.
Why This Is Important
The House Financial Services Committee holds significant influence because it directly supervises federal agencies shaping digital asset regulations. It was instrumental in moving forward the GENIUS Act, focused on stablecoins, and the Clarity Act, focused on market structure. Hill has led the committee since its previous chairman, Patrick McHenry, left Congress.
The Details
According to Hill, the House of Representatives successfully reached agreements between Democrats and Republicans on topics including stablecoin sales, decentralized finance, and ethical standards before approving its own version of the Clarity Act.
“We addressed all these subjects effectively in the House legislation, earning the support of 78 Democratic representatives last year,” Hill mentioned. “So, I don’t see any reason why the Senate can’t reach a similar agreement on our bill.”
Hill spoke with CoinDesk at the Digital Assets and Emerging Tech Policy Summit, hosted by Vanderbilt University and the Blockchain Association in early April. The discussion covered various policy issues under his committee’s consideration.
He noted that the Senate group working on its own version of the bill had started incorporating elements from the House bill during negotiations prior to the recent Senate Banking Committee review scheduled for this month.
“In my view, the Senate has leaned heavily on much of the House’s efforts regarding FIT21 [the Financial Innovation and Technology for the 21st Century Act] from the prior session of Congress and our work on the Clarity Act in the current session,” Hill stated in April. “This influence is quite noticeable in the Senate Agriculture Committee’s review and in the initial drafts of the Senate legislation.”
Hill also mentioned that Senate negotiators have been keeping the Hill and his House colleagues informed about their progress. He added that both he and Rep. Bryan Steil, who leads the House panel on Digital Assets, Artificial Intelligence, and Financial Technology, have been actively communicating with senators working on the Clarity Act.
Hill stated that his committee is currently focusing on other policy areas, specifically tokenization and defining the legislative branch’s role in this area. In late March, the Financial Services Committee conducted a hearing dedicated to tokenization. Hill explained the goal was to help lawmakers examine whether the Securities and Exchange Commission (SEC) and banking authorities might require new powers or regulations to help firms tokenize physical assets.
Part of this process involves figuring out if Congress needs to pass laws or if the existing regulatory agencies can handle these decisions, Hill explained.
“Tokenizing an asset like a standard stock essentially means updating the systems used to manage it,” Hill said. “It’s not about changing the current laws. The same legal and regulatory rules that apply to traditional stocks also apply to tokenized versions of those stocks, right? In our opinion, these hearings are important for raising awareness among committee members.”
Hill also noted that both the House and Senate, as the bodies overseeing these agencies, can hold hearings to question how current financial systems can be adapted to function on blockchain-based platforms.
Along similar lines, Hill mentioned he was examining the possibility of tokenizing deposits within commercial banks. This change could allow for direct payment processing without going through a third-party intermediary.
While this change might not happen immediately, Hill said it is something his committee plans to investigate further.
“Consider the progression from oral transactions to written paper markets, and then to digitizing those paper systems in the ’70s and ’80s,” he reflected. “This shift improved accuracy, reduced fraud, sped up transactions, lowered the need for cash on hand, and made settling trades smoother.” He added, “It’s essentially an operational decision, and the main challenge is making different systems work together, not the technical difficulty of implementing it.”
Consequently, markets dealing with tokenized assets will need effort focused on system compatibility and meeting regulations, Hill concluded.
“We’ll determine if there is a need for new laws or if the regulators can manage it independently, and that’s good. That’s exactly what Congress is supposed to do,” Hill remarked.
Another significant area Hill is monitoring, particularly regarding digital currencies, involves efforts to modernize tax rules for digital assets. The House Ways and Means Committee is already tackling tax-related matters, and a bipartisan coalition of legislators recently reintroduced a specific bill addressing cryptocurrency taxation earlier this month.
Furthermore, upcoming elections later this year will decide control of the House and Senate. Similar to the 2024 elections, the crypto industry is actively involved in primary campaigns, seeking to support candidates viewed favorably by various crypto-focused political organizations.
Hill mentioned that the Financial Services Committee has a long-standing involvement with digital assets, citing the tenures of former Rep. Patrick McHenry and his Democratic colleague, Rep. Maxine Waters.
“Over the last four years, the digital assets community has really gotten involved, not only on policy matters but also in the political arena,” Hill remarked. “We witnessed that impact during the 2024 elections … Therefore, I expect the digital assets community’s political efforts will be significant for the 2026 election. It’s a bipartisan effort. It generally supports individuals who favor innovation.”
Hill emphasized that the industry’s political activity during this election cycle is crucial, and that there is already existing bipartisan interest in cryptocurrency policy.
“If we succeed in establishing the GENIUS Act regulations and successfully pass the Clarity Act, we’ll likely begin a joint year-long regulatory process between the CFTC and SEC,” Hill explained. “My belief is that the focus will then shift back to the regulatory agencies to make sure our House’s vision for an integrated, modern, and effective approach is fully carried out.”
Thursday
- 14:00 UTC (10 a.m. ET) The House Financial Services Committee will conduct an oversight hearing featuring federal bank regulators.
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