Rep. French Hill remains hopeful for crypto legislation before the end of 2024

Rep. French Hill says he is "still optimistic" that a crypto market structure bill and legislation to regulate stablecoins could be considered before the end of the year.

"I'm still optimistic that FIT 21, which is the regulatory framework bill, and the stablecoin bill have possible consideration in the lame duck," the Arkansas Republican said on Tuesday in a virtual conversation with Dr. Christopher Brummer at the 8th Annual Washington DC Fintech Week. Brummer is the founder of DC Fintech Week and a professor of financial technology at Georgetown Law.

The lame duck is the period after the November election and before a new Congress steps in in January.

"In all lame duck sessions, they take the direction from who wins the top of the ticket, so that will govern a bit of what we're dealing with," Hill said. The future of the bills also depends on end-of-year legislation, including the National Defense Authorization Act. The act, or NDAA, authorizes appropriations for defense-related activities.

The U.S. House of Representatives passed FIT 21, a crypto market structure bill, in May. The bill gives the Commodity Futures Trading Commission new jurisdiction over "digital commodities" and asserts that the Securities and Exchange Commission would oversee digital assets offered as part of an investment contract. 

Next year's 'top priority'

Work is also underway in the House on a stablecoin bill, led by House Financial Services Committee Chair Patrick McHenry, R-N.C., and the committee's top Democrat, Maxine Waters, D-Calif. That legislation advanced out of the Republican-led committee last year but has not gained traction. At the time, Waters called the bill "deeply problematic" due to a provision that allows state regulators to approve stablecoin issuances without Federal Reserve input.

Hill leads the House Financial Services subcommittee focused on digital assets and has said he is vying to lead the full House Financial Services Committee if Republicans still control the House of Representatives next year. The current House Financial Services Committee Chair, McHenry, who is retiring in January, has voiced similar optimism for FIT21 to gain traction at the end of the year. 

Hill said on Tuesday that if legislation doesn't happen this year, it will be a "top priority" for next year. However, investment bank TD Cowen took a more pessimistic stance in a note published last month. 

The amount of time available to pass crypto bills is even more constricted since lawmakers have to pass legislation to fund the government as well as the National Defense Authorization Act, said TD Cowen Washington Research Group's Jaret Seiberg in the note.