Senator Tim Scott’s Proposal for a New Subcommittee on Digital Assets

Republican Sen. Tim Scott proposed creating a subcommittee focused on the digital asset industry if he becomes chair of the U.S. Senate Banking Committee.

Scott, who has been friendly to the crypto industry, is currently the top Republican of that committee led by Sen. Sherrod Brown, D-Ohio. Scott could lead the committee next year if Republicans make up the majority of the now Democrat-controlled Senate in the upcoming elections.

“Wouldn’t it be kind of cool if we had a subcommittee on the banking committee that focuses on the industry so that we bring more light to the conversation, more hearings on the industry, so that we get things done faster,” Scott said on Wednesday during the Wyoming Blockchain Symposium.

The House Financial Services Committee, which, like the Senate Banking Committee, has jurisdiction over the U.S. Securities and Exchange Commission, has its own panel focused on digital assets and has held a number of hearings on crypto over the years.

There are “headwinds” in the Senate Banking Committee, specifically coming from Brown and Sen. Elizabeth Warren, D-Mass., said Sen. Cynthia Lummis, R-Wyo., on Wednesday during the panel with Scott.

“They’ve been extremely influential with their colleagues on the Democrat side of the aisle, so we’ve hit the wall on the banking committee,” Lummis said.

Despite that, Lummis still sounded hopeful that legislation could happen this year. A future bill to regulate crypto would have to come through the Senate Agriculture Committee, she said. The best-case scenario is a bill that focused on the U.S. Commodity Futures Trading Commission, which it has jurisdiction over, passes out of that committee after the election, Lummis said.

Then the legislation would be “Christmas-treed,” Lummis said, with add-ons including language to regulate stablecoins and potentially Senate Majority Leader Chuck Schumer’s SAFER Banking Act. That bill would give cannabis businesses access to banks. Combining crypto legislation with a bill allowing financial institutions to provide services to the marijuana industry was floated earlier this year.

Dwindling days to work in Washington could prove to be a challenge, Lummis said.

Lawmakers in Washington are working on a number of bills to regulate crypto but have yet to reach President Joe Biden’s desk. In the Senate, lawmakers are working on bills to regulate the crypto industry. Sens. Cynthia Lummis, R-Wyo., and Kirsten Gillibrand, D-N.Y., introduced a bill in April that would block algorithmic stablecoins while creating a framework for stablecoins. Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., is also working on a bill to regulate crypto, which is expected to be resumed in September.

On the House side, lawmakers passed a Republican-led crypto market structure bill in May that gives new jurisdiction to the CFTC over “digital commodities” and asserts that the SEC would oversee digital assets offered as part of an investment contract. Work has also been underway on a bill to regulate stablecoins.

Schumer stated during a Crypto4Harris town hall last week that he intends to pass legislation to regulate crypto by the end of this year.