North Carolina’s Representative Patrick McHenry, an incoming chair of the House Financial Services Committee, has reintroduced a crypto bill.
The reinstatement of the Financial Services Innovation Act
McHenry, who had pushed the Financial Services Innovation Act in 2016 and 2019, announced on Dec. 19 that the act will be reintroduced. The legislation aims to modernize federal financial institutions and create special divisions to help innovators, including those working with blockchain and cryptocurrencies.
According to McHenry, legitimate companies can avoid legal trouble by striking a deal to ensure compliance with agencies like the SEC and CFTC. The measure was motivated by North Carolina’s regulatory sandbox program.
The future chairman of the House Financial Services Committee argues that the regulatory framework should encourage rather than inhibit creative financial practices. He claims his legislation will streamline the process by which financial institutions and entrepreneurs bring innovative products and services to market without reducing vital consumer safeguards. Moreover, he expressed his delight at reintroducing his law to foster economic variety and expansion.
The Republican reassured he would continue to advocate for a modernized regulatory framework that clearly outlines best practices for fintech companies.
What is the Financial Services Innovation Act?
The Financial Services Innovation Act, also known as H.R. 9557, aims to foster innovation in the financial sector. According to the act, federal regulators will be required to set up internal Financial Services Innovation Offices (FSIOs).
The FSIOs will grant a company an “enforceable compliance agreement.” The platform can market its innovative product or service per a new compliance strategy.
Among other federal agencies, the US Office of the Comptroller of the Currency (OCC) has already announced plans to set up a dedicated innovation office for financial technology.
McHenry will succeed California Democrat Maxine Waters as Chair of the House Financial Services Committee in January. The Republicans assume to control the House by a 222-213-213 margin. Waters and McHenry, as co-chairs of the committee, have spearheaded multiple bipartisan efforts to determine what went wrong at the cryptocurrency exchange FTX and whether or not former CEO Sam Bankman-Fried is legally liable for the mishap.