Although a few races from last week’s midterm elections have yet to be called, the results that are locked in suggest that passing legislation to set rules of the road for crypto markets will be more difficult than previously expected. Republicans now have a slim majority in the House. This places Reps. Patrick McHenry (R-N.C.) and Glenn (GT) Thompson (R-Pa.) in line to control the House’s Financial Services and Agriculture committees, respectively. Both committees are engaged in efforts to clarify how certain crypto assets are regulated, an important step toward enhancing trust in crypto markets. But, whether the new chairs can advance legislation in a tightly controlled House is unclear.
In the Senate, Banking Committee Chair Sherrod Brown (D-Ohio), a crypto skeptic, will likely stay on as leader of the committee with jurisdiction over how crypto assets that are securities should be policed. While would-be Financial Services Chair McHenry has a record of building bipartisan consensus in the House, it’s possible that his committee might be challenged to find common ground with a Senate Banking Committee helmed by Brown.
Lawmakers who have signaled a willingness to engage with crypto policy generally fared well this midterm cycle. Katie Britt, who staffed retiring Sen. Richard Shelby (R-Ala.) before running to replace him, won her race and has said supporting innovation in the crypto sector can enhance American competitiveness. Rep. Ted Budd (R-N.C.) won the race to replace retiring Sen. Richard Burr (R-N.C.), and he has taken an interest in digital assets and received the Digital Future Award from the Crypto Council for Innovation for showing “a willingness to learn from and interact with the digital assets industry.” And Rep. Josh Gottheimer (D-N.J.), who earlier this year introduced a bill regulating stablecoins, retained his seat that Republicans had hoped to flip.
The outlook for crypto legislation next Congress is murky considering slimmer-than-expected margins in the House, and another narrowly controlled Senate will make it more difficult for legislation without broad bipartisan support to pass. But an unclear path forward for crypto policymaking could mean more time to educate lawmakers on how digital asset policy may impact other sectors, including philanthropies. Hopefully this increases the odds that thoughtful crypto rules protect consumers and protect their ability to donate these emerging assets to nonprofits should they so choose.