French Hill Talks Blockchain Legislation on Two Podcasts

A file photo of U.S. Rep. French Hill (U.S. House website)

U.S. Rep. French Hill of Arkansas recently appeared on two popular blockchain podcasts to discuss his thoughts on blockchain legislation, regulatory matters and the current state of cryptocurrency.

Hill has long been a player in blockchain legislation, serving as the inaugural chairperson of the House Subcommittee on Digital Assets, Financial Technology, and Inclusion, as well as vice chair of the House Financial Services Committee. He’s currently running to succeed fellow Republican U.S. Rep. Patrick McHenry of North Carolina after McHenry retires as chair at the end of the current legislative session.

Central to both his appearances on the “Bankless“ and “Unchained“ podcasts was the Financial Innovation and Technology for the 21st Century Act (FIT21), which Hill co-authored and co-sponsored. 

Hill said FIT21 would offer regulatory clarity by providing a comprehensive framework for the cryptocurrency industry. The legislation would also set consumer protections, installing the Commodity Futures Trading Commission as the leading regulator of digital assets. 

The bill, which passed the House 279-136 in May, aims to clarify which crypto assets are securities and which are commodities. It received bipartisan support in the House and is currently awaiting a decision in the Senate.

Hill said on Bankless that FIT21 would lay out “a clear blueprint” of a path forward. He said it would “certainly” be more clear than the legislation right now — “which is zero.”

He also said Congress was “caught a little flat-footed” because the Senate doesn’t have many legislative days left, but that “we’re going to work our tails off to find a bicameral approval of something in this realm before the end of this Congress.” 

There will be “a big lame duck session” after the presidential election, Hill expects, as well as a push throughout the last two weeks of July and all of September. If FIT21 is not approved in this session, Hill said it will be the top priority in the next session.

Hill also discussed the status of other legislative efforts to regulate the cryptocurrency industry, primarily the Staff Accounting Bulletin No. 121 (SAB-121), which passed the House and the Senate with bipartisan support before being vetoed by President Joe Biden. The House failed to overturn the veto of SAB-121 on July 11.

Current State of Cryptocurrency 

Throughout both podcasts, Hill was notably critical of the U.S. Securities and Exchange Commission’s (SEC) approach to cryptocurrency regulation, particularly under the leadership of Chairman Gary Gensler.

“Chairman Gensler keeps going into court and losing. He’s been told by federal judges that his rulings are arbitrary and capricious,” Hill said on Bankless.

Hill was particularly critical of the SEC’s actions with SAB-121, criticizing it for not coordinating with other financial regulators on the issue. 

“We have allowed the administrative state, under both Democrats and Republicans, to creep up into every oozing crack and hole in the roof of the American economic system for five decades,” Hill said on the Bankless episode.

When asked on the Unchained episode how the Supreme Court overturning the Chevron decision would affect the industry, Hill said agencies have been creating “rules by enforcement” rather than providing clear guidance, which FIT21 attempts to resolve.

He also said cryptocurrencies and blockchain “didn’t exist” when Chevron was decided, so those issues were “not contemplated” at the time.

Looking Forward

Beyond FIT21, Hill identified other areas for future legislation, including a national privacy standard, data ownership laws, as well as regulations for stablecoins, decentralized finance (DeFi) and non-fungible tokens (NFTs). 

In the Bankless episode, he also emphasized the potential of blockchain technology to make documentation and payment more effective and transparent. 

“Wherever there is a high agency cost situation with lots of stops in the people process chart, people want to disrupt that through the use of a blockchain operating system,” Hill said in the episode. “I find that exciting. I think everybody benefits. Compliance officers benefit, consumers benefit, businesses benefit.”

Looking ahead to the 2024 elections, Hill said a Republican administration will “lean more favorably” toward the industry, but that regardless of the outcome, crypto will move forward.

On Bankless, Hill said the U.S. “should be leading” the industry, and that “we’ve gotten that message through to both Democrats and Republicans, so I’m optimistic no matter who wins the presidency or how the House and Senate work out, I think crypto will move forward.”

He also said on Unchained that if Donald Trump is reelected, Hill “has no doubt” that he will make a recommendation to the Senate for a new SEC chair. Hill said in the episode he would love to see Commissioner Hester Peirce as the new Chair. Peirce was appointed to the SEC in 2018 by Trump.

Overall, Hill is optimistic about the future of crypto and blockchain technology.

“Let’s know good days are ahead,” Hill said on Bankless. “Let’s make sure we think about blockchain like we thought about the internet in the 90s. Let’s let it flourish. And we can regulate and tax people with what they do on it, not block them from trying.”