Pro-Crypto Lawmaker Hill Eyes Digital-Asset, Banking Regulation

(Bloomberg) — A powerful House panel overseeing financial regulators and Wall Street is set to gain a new chairman who has cryptocurrency and banking deregulation at the top of his agenda as Republicans prepare to take unified control of Washington in January. 

Representative French Hill, a former banker who has worked at the US Treasury Department, bested three other Republicans to win the gavel of the Financial Services Committee, a position from which he plans to push a massive policy repositioning from the Biden administration.

But the affable Arkansan will need to navigate the slim and fractious House majority to see any legislation over the finish line. And he has recently expressed hesitation about the idea of a Bitcoin reserve, potentially putting him at odds with President-elect Donald Trump.

With his even-keeled temperament, Hill, 68, is likely to feel like a continuation of outgoing Chairman Patrick McHenry’s tenure, according to Jennifer Schulp, director of financial regulation studies at the Cato Institute.

“We’ll see a similar leadership style in terms of trying to work with the other side, where possible, and trying to find compromise, where possible,” she said. 

On Tuesday, both McHenry and Hill received a standing ovation at the Blockchain Association Summit in Washington. McHenry called Hill “the right person” for the chairmanship and said he has the ability to be a diplomat to “crypto skeptics” in the House. 

House GOP leadership has already signaled they want to pass new legislation to clarify crypto regulation in Trump’s first 100 days. 

Hill previously backed legislation to establish clearer lines for which agencies regulate digital assets. That bipartisan measure passed the House in May and will help serve as a foundation for what is to come in 2025. 

“We want to work with the Trump administration and Senate Banking Committee Chairman Tim Scott and try to get all of us on the same page as to how do we proceed,” Hill said about crypto legislation in an interview with Bloomberg Television’s Balance of Power on Monday. 

Despite Republicans taking over both the chambers of Congress and the White House next year, getting digital asset-related legislation enacted will “still be a heavy lift,” Schulp said.

Hill will have to navigate a narrow majority in the House, including strong differences of opinion within his own party, to see any legislation over the finish line. He has recently expressed hesitation about the idea of a Bitcoin reserve, something Trump has supported.

Lawmakers will also face pressure from consumer advocacy groups not to give the digital asset industry free rein. 

“Everybody should be concerned with how the crypto industry used its predatory profits with the intent of purchasing dozens of elected officials and then making demands on them,” said Dennis Kelleher, CEO of Better Markets, a financial policy think tank. 

The question is now how policy makers will weigh industry demands over the public interest, according to Kelleher. 

Hill founded a community bank, Delta Trust & Banking Corp. in Arkansas in 1999 before he joined Congress. Prior to that, he served as Treasury’s deputy assistant secretary for corporate finance during the George H. W. Bush administration. 

Hill’s also developed a focus on foreign policy matters through stints on the House Foreign Affairs Committee and on the House Permanent Select Committee on Intelligence. That experience is also likely to inform his work when geopolitical risk, payments and sanctions intersect with the world of finance. 

In a 2021 hearing on global capital markets, Hill focused on whether Chinese companies traded on US exchanges should be subject to greater disclosure requirements about their corporate structure and financial reports. He has also called for the US to remain engaged on the world stage, including by maintaining alliances like NATO.

Hill’s perspective on the role of the US as a global power player will “absolutely matter” to how the next Congress and Trump administration approach geopolitical risk and its impacts on finance, said Peter Dugas, executive director at Capco, a global financial services advisory firm. 

“Payments are going to be the next weapon that people need to be paying attention to, and understand the potential implications on trade, even whether an institution should make a loan or investment to a particular firm because of their geopolitical exposure,” Dugas said. 

–With assistance from Kailey Leinz.

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