Making America Pro-Crypto | Congressman French Hill

This episode explores the potential for the United States to become a pro-crypto nation, featuring insights from Congressman French Hill on the necessary legislative changes and political landscape to achieve this goal.

1. The U.S. is gradually shifting towards a more crypto-friendly stance, with increasing momentum in Washington, D.C.
2. Bipartisan support is crucial for advancing pro-crypto legislation, as demonstrated by the progress on the SAB 121 repeal and FIT 21 bill.
3. Blockchain technology offers significant benefits, including increased efficiency, reduced fraud, and lower costs.
4. Future legislative priorities include national privacy laws and expanding the use of blockchain for various asset classes.
5. The upcoming elections could significantly impact America's crypto policy, with both parties showing varying levels of support for crypto innovation.

1: Introduction

The host introduces the episode's theme, discussing America's potential shift towards a pro-crypto stance and the importance of legislative momentum. David Hoffman: "The question today is, is the United States of America flipping pro crypto?"

2: Political Climate and Assassination Attempt

The discussion starts with the recent assassination attempt on President Trump and its implications for the political climate. Representative French Hill: "Our country's been no stranger to violence and violent attacks on our political candidates and presidents."

3: Trump's New VP and Crypto Policy

The hosts and Congressman Hill discuss the potential impact of JD Vance as Trump's vice president on crypto legislation. Representative French Hill: "I think the short answer to that is yes. He has asked a lot of questions in recent weeks in the Senate about the prospects for crypto related bills."

4: SAB 121 Repeal and Legislative Roadmap

An in-depth discussion on the repeal of SAB 121, its implications, and the legislative roadmap for crypto in the U.S. Representative French Hill: "I learned that the SEC, the Securities and Exchange Commission staff, and perhaps some of its commissioners don't know what they're doing and don't understand custody."

5: Bipartisan Support for Crypto Legislation

Exploring the bipartisan support for crypto legislation and the importance of maintaining this approach. Representative French Hill: "Common sense prevails and is bipartisan."

6: Future of Crypto Legislation

Congressman Hill outlines future priorities for crypto legislation, including national privacy laws and tokenizing asset classes. Representative French Hill: "I think the administration is working constructively with us. I think they should not have vetoed the congressional Review act."

7: Impact of Upcoming Elections

The hosts and Congressman Hill discuss the potential impact of the upcoming elections on America's crypto policy. Representative French Hill: "No matter who wins the presidency or how the House and Senate work out, I think crypto will move forward because of the education that we've delivered in Congress."

1. Stay informed about the legislative developments related to crypto by following credible sources and updates from Congress.
2. Engage with your local representatives to express support for pro-crypto legislation.
3. Consider the potential benefits of blockchain technology for your business or personal investments.
4. Explore opportunities to participate in the crypto market, keeping in mind the risks and regulatory environment.
5. Educate others about the advantages of blockchain and crypto to build a broader base of support.
6. Keep an eye on the upcoming elections and the candidates' positions on crypto-related issues.
7. Support organizations and initiatives that advocate for clear and fair crypto regulations.
8. Take advantage of educational resources to better understand the technical and legal aspects of blockchain technology.
9. Stay vigilant about the security of your crypto assets and follow best practices for custody and transactions.
10. Participate in community discussions and events to stay connected with the latest developments in the crypto space.

Bankless Nation, the question today is: Is the U.S. flipping pro-crypto?

The United States has either been anti-crypto or neutral since the birth of Bitcoin. That’s starting to change. For the first time, we actually have momentum in D.C. There will be many battles ahead, but right now, crypto is making progress.

What would a pro-crypto America look like? What laws do we need to pass to get there? Who do we still need to convince, and how close are we?

People

French Hill, Donald Trump, JD Vance, Gary Gensler

Companies

Kraken, Toku, Fuel, Uniswap, Arbitrum

Books

None

Guest Name(s):

French Hill

Content Warnings:

None

David Hoffman
Bankless nation. The question today is the United States of America flipping pro crypto? I certainly hope so. The US has been either anti crypto or neutral since the birth of bitcoin, and that's starting to change. It feels like for the first time, we actually have momentum in DC.

By we, I mean the crypto movement. That's not to say there's not going to be battles ahead. There will certainly be battles. But right now, crypto is actually making some progress. The question for today is, what would a pro crypto America look like, and what laws do we need to get us there?

Who do we need to convince? How close are we? Today we have pro crypto Congressman French Hill, who gives us his take on how to get there. We discuss a few things today. Number one, Trump's new vice president, his name is JD Vance.

Would he be a crypto friendly vice president? Number two, what we learned from the SAB 121, repeal the vote that got passed in Congress and then Biden's veto of it. Number three, the legislative roadmap for crypto in the United States. Number four, Gary Gensler and the administrative state. Number five, how to keep crypto bipartisan.

Number six, the impact of a Trump presidency on crypto. I want to do our usual political disclaimer before we get in today. Bankless, as you know, is not a political podcast. We don't divide on red or blue lines. We have no party affinity in the US or any other country around the world.

What we do care about is the values of decentralization and autonomy and power to the people that underlie this technology of crypto. And to the extent those values are political, so are we, but they don't necessarily divide on party lines. We'll continue to give a voice to those values, no matter what political party they come from. So let me just say, clearly, anyone from any party is welcome on bankless. And lastly, on a personal note, I started this conversation asking Representative Hill about the impact of the Trump assassination attempt.

It was just top of mind for me. I couldn't escape it. And I can tell you, in preparing for this interview, the words assassination attempt against Trump were just surreal to write, and they were even surreal to ask. In the conversation, I almost had to will myself to say the words. It's like my brain couldn't fully accept the gravity of what actually happened.

There really was an assassination attempt against the current presidential nominee, and it was almost successful. If there was a slight change in the wind, a different turn of the head of, we'd have an assassinated president killed in broad daylight and witnessed by the entire world. These are just the times we're living in, and through them I'm hopeful we find ways to unify on the values that made this country great. We have disputes settled by protocols instead of political violence. The Constitution itself is a nonviolent coordination technology.

Just like crypto. The best american values are also crypto values. And that's what today's episode reminds us of. Alright, lets get right to the conversation with representative Hill, but before we do, I want to thank the sponsors that made this episode possible, including our recommended exchange, the place to go buy and trade your crypto that is Kraken. Go create an account if you want.

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So don't miss out on the fuel opportunity. Click the link in the description below to get started. Fuel points are here. Go get it. Bankless nation representative French Hill is a republican congressman.

David Hoffman
He's representing Arkansas second District, and I think of particular interest to crypto listeners. Representative Hill is the vice chairman of the influential House Financial Services Committee, and he leads the subcommittee on digital assets. So that's us in crypto and financial technology. He's also had a history in banking, in finance, something that we affectionately in crypto call tradfi, and he's previously served in the us treasury. Representative Hill, welcome to bankless.

Representative French Hill
It's great to be with you. Thanks for the invitation. We're excited to talk to you. And these are very interesting times. May you live in interesting times, as the saying goes.

David Hoffman
I actually think we need to start here, though, because this is on everyone's mind as we're entering this episode. I definitely want to talk crypto and legislation, let that be the bulk of the episode. But there was a recent assassination attempt against President Trump during an election event on Saturday. So this is a political violence in America. I can speak for myself.

I was in absolute shock as this happened. I feel like many Americans were as well, concerned at the fallout from this. Before we talk about crypto, just as you zoom out, what are the implications of Saturday's assassination attempt, just like, for the future of this country, like, what, what do you see on the horizon? Well, unfortunately, through our 248 years of existence as a country, our country's been no stranger to violence and been no stranger to violent attacks on our political candidates and presidents. I mean, it sometimes it seemed like it was a routine experience from Lincoln to Garfield to McKinley in the last quarter of a century, in the 19th century, to, of course, my youth, where Jack Kennedy, Martin Luther King, and Robert F.

Representative French Hill
Kennedy were all murdered in an assassination attempt. So I think it's part of our culture. We've got to recognize that. I feel horrified for the people at the event, the firefighter from Buffalo who was killed protecting his family, others that were injured. And as somebody who's been around presidential politics literally since the late 1970s, and having done presidential advance for events before, I also, as a member of Congress, was shocked and appalled by the lack of preparation by the campaign advance team and the Secret Service for leaving those vulnerable, cutaway shot windows open.

This is just a violation of what I call advance 101 for a political event, or any event, for that matter, if you're interested, if there's a security risk, which is that you don't leave an open line of sight to the stage for a political event from any direction. And so there'll be a major investigation. Speaker Mike Johnson has announced that. But look, let's all turn to each other, to our neighbors, to our friends, and really work to dial down the demonization of the people who don't agree with us on every topic. I mean, by golly, I mean, we agree with on 90% of stuff, and there's just no reason to demonize people because they're in a different political party.

I mean, it really, this is a new thing to me. I mean, I'm 67 years old, so I've been around the block, and I didn't pick who I went canoeing with or backpacking with or mountain climbing or playing golf on a Saturday morning, with who, what their political party was. I didn't even know what political party they were or what religion they were. And this kind of obsession with this in the last ten or 15 years has gotten really tiresome. And it lends itself to environments like we witnessed over the weekend.

David Hoffman
Yeah, well said. Particularly on the point about unity. I guess political violence has been in the past in America. It is new for kind of a new generation who hasn't experienced it, but it's certainly not new for America. And speaking of new generations.

So Trump's VP nominee was announced yesterday, a gentleman by the name of JD Vance. Curious, what do you think of this candidate? So he's on the millennial side, skewing towards maybe crypto. Interested. I think he's, like, 39 years old.

If elected, would Vance be a crypto friendly vice president? I think the short answer to that is yes.

Representative French Hill
He has asked a lot of questions in recent weeks in the Senate about the prospects for crypto related bills. He's been drafting one of his own. And we've tried to provide everyone in the Senate a full look at what we've done for the past four years on this topic, both in stablecoins and in creating a market structure bill, a regulatory framework bill for digital assets. And I suddenly see some interest in the Senate. Senator Vance is one of those people.

But Senator Haggerty of Tennessee, obviously, Senators Loomis and Gillibrand have been leaders for several years. And then just last week, Debbie Stabenow of Michigan and John Bozeman of Arkansas, my senior senator in my home state, had an ag committee hearing with Chairman Benham from the CFTC, the commodity future Trading Commission on the spot market for bitcoin, and also just, and I think Chairman Benham did a great job outlining his general support for regulatory framework. So we're making progress over there. I think Vance would be a pro lean, pro crypto participant if he's elected vice president. As you know, he's a Yale graduate.

He's a former venture capital in Silicon Valley, venture capitalist from Silicon Valley. And President Trump has made some positive comments about our market structure and crypto innovation. So I think, I think that would be good. And we've made, for those of you listening who are big Biden supporters or democratic administration supporters, we've really worked hard the last three years, three and a half years. Building a consensus in the Biden administration that a stable coin regime and a market structure bill like fit 21 that I wrote with GT Thompson and my colleagues is exactly the approach that we need to take to move innovation, venture capital, blockchain usage forward in our country.

David Hoffman
Yeah, that's fantastic. And as we move into kind of the legislation, I want to ask a higher level question of you, Representative Hill. So you get an a on a website that we often refer to. It's called the stand with crypto website. For your track record on crypto, it's because you've co sponsored the SAB 121 repeal bill, also co sponsored fit 21, also co sponsored the uniform Treatment of Custodial Assets act, also co sponsored the anti CBDC bill.

So you've got the receipts you were in, in crypto and doing things here with respect to legislation before it was cool. And I'm glad other members of Congress have, have joined you recently. I want to ask you, though, at the highest level, why is crypto important to you? Why do you support it? Well, for my whole career, I've always had a interest in financial services.

Representative French Hill
Obviously, I started my financial services career back in 1979. I was a bond, a bond trader and a bank analyst early in my career. But I've also been on the operation side of banking and finance and that's where my interest was piqued. I'm a huge believer in a blockchain operating system that it resolves so many of the concerns that I've always had in my career. What are those?

How do you have a more efficient system? How do you reduce errors? How do you have less fraud and less confusion? How do you compress agency costs in the distribution of a product, thereby offering consumers business to business, or, you know, business to consumer products that are, that can cost less and have more accuracy. And I believe that many of those challenges are solved in the use of a blockchain operating system.

Another thing that I've been engaged in, when I was in venture capital, private equity, and then owning my own financial services company, we were very involved in private placements of private securities for, you know, our own portfolio or for other clients and those over the counter markets. One of the broadest, I guess, in the history of the country, until Bloomberg came around, in a way, was the municipal bond market. Small public finance issues around the country. But like the remittance business that you referenced a minute ago, large, over the counter, thinly traded securities also have a high bid and ask spread and high agency costs, like in 144 a debt securities or in some municipal finance, although that's narrowed. You get my point.

So I've always been curious about putting stock ledgers and bond ledgers out on a blockchain and then also facilitating a secondary market through a blockchain. And I think, and look, there are many people do. This is not. We're not, you and I are not talking about revolution now. People are doing what I'm describing now because it's an obvious place inside the financial services industry where people want to deliver better service, more effective, less fraud, more accurately timed with a tokenized payment, and do it at lower cost.

And that's why I think as blockchain methodology improves, you'll see that expand. The metaphor of a blockchain as a financial operating system. I think it's more than a metaphor too. It's like a reality, I hope that gets more widely distributed in terms of the us government's knowledge on this subject. But we stand with you in our hopes for this space and our vision for this space as well.

David Hoffman
It could be a revolution in the way the US does finance and bring benefit to an extraordinary number of Americans. Let's talk about how we get it done. So let's talk about legislation. And I want to go through some recent legislation, some victories, some almost victories, some defeats. Let's talk with the.

Let's talk about the SAB 121 repeal. Okay. And I'm naming legislation here. I think bankless listeners will be familiar with it. We did an episode with Patrick McHenry the week that Fitzgerald fit 21 was going out, and SAB 121 was just on the back of that vote.

But let's talk about SAP 121. So bankless listeners will remember this is a pro crypto bill that cleared up. That would clear up an accounting loophole that the SEC was using to prohibit, essentially, us banks from holding crypto. And it passed the House, and it even passed the Senate. This was the surprise.

It passed the Senate with bipartisan support. So you had democratic senators, even Chuck Schumer in the Senate voting yes to the SAB 121 repeal. So SAB 121 made it all the way to Biden's desk. This is kind of the first major pro crypto legislation, pretty simple legislation for his signature. And he turned it back.

He vetoed it. So it was vetoed dead in the water. Last week, it went back in front of Congress again. But this time, of course, to override a veto, we need a two thirds vote in Congress. It couldn't make that two thirds threshold.

I'm just curious, from this whole experience, what did we learn? What can we learn from SAB 121? What are the takeaways? What did you learn? Well, number one, I learned that the SEC, the Securities and Exchange Commission staff, and perhaps some of its commissioners don't know what they're doing and don't understand custody.

Representative French Hill
Number two, I learned that this could have been crafted in a much more effective, narrow way and maybe met the standard that the SEC was looking for, but not sweeping up all these other participants. Number three, I learned that the SEC, once again demonstrated to me they don't coordinate their activities with other major financial services players in Washington. Both Janet Yellen, treasury secretary, and Jay Powell, chairman of the Federal Reserve, both have testified before our committee. They were not consulted on staff accounting Bulletin 121, changing custody rules. Now, this is ridiculous, because custody is really a bank supervisory thing.

It's not an SEC thing. SEC issuers, markets, investors, brokers. Right. 33 Act. 34 act.

And brokers use custodians, and so to impose their staff accounting bulleted on here without coordinating it, I think gave the SEC perhaps a black eye in the interagency process. And then finally, I found that, look, common sense prevails. Wait, what? What? Common sense prevails and is bipartisan, that this was not coordinated, not effective, not the right approach.

We had 21 House Democrats vote with us on our congressional Review act, led ably by Mike Flood of Nebraska, my good friend and colleague from Nebraska, entrepreneur, businessman from Lincoln, Nebraska, before he was in the state legislature and now in Congress. Mike led that effort. And then, as you point out, we got twelve Democrats voting with us in the Senate, including the majority leader, Chuck Schumer. So it's bipartisan. We have a better way to go about it.

And in fit 21, which members could then vote on the very next week, we correct all this custodial confusion. So those are some of my takeaways. I wish President Biden, I mean, it would have been okay if he, I mean, he has his right to veto it, but in the veto message, he could have said, and I have directed the SEC to work with bank regulatory agencies and do this in a different way, or I've asked him to pull it back and start over. I don't know. But they didn't do any of that.

I think it was a black eye to the administration on crypto, once again, by, I think, a mistake in judgment by the securities and Exchange Commission. Do you have any speculation as to why this was vetoed? So, as you said, yeah, common sense prevailed in congress, but it didn't seem to prevail in the White House. There were multiple ways to handle it. As you said, you could veto it and you could say, Gensler, sec, go take care of this in the background.

David Hoffman
It doesn't even need an act of Congress to resolve this, so go fix it. They chose not to. And this is at a time where I can tell you the crypto community was hoping that crypto would be bipartisan. Was hoping that the Democrats, in particular, the White House, would sort of pivot over to the crypto side of things. And it seemed like this was an intentional choice not to.

Do you understand why? Yeah, I don't know that. But don't forget, they have pivoted. They've been very constructive on working with us on stable coins and then on fit 21. It is very important for the whole ecosystem to know that thanks to the leadership of Janet Yellen and others in the administration, the president did not threaten to veto fit 21.

Representative French Hill
They had a statement of administrative policy that's called a SAP an SAP. And it said, hey, there's some things in it we would like to change, but we are not issuing a veto threat, and we'd like to work constructively in a bipartisan basis towards a regulatory framework. I mean, that is huge. That's huge. And as a result, we got 71 Democrats.

I think we could have possibly gotten more. Who joined all the Republicans in passing fit 21, which is our market structure, regulatory framework bill across the House floor, 279 votes. Yes. So, and we had about maybe ten or 15 people not voting that day in the House. So that's, that's not a bad, bad vote.

So I think the administration is working constructively with us. I think they should not have vetoed the congressional Review act. They should have just said, you know, we're going to direct the SEC to withdraw it. They didn't. So we had a veto override message.

We didn't hit the two thirds. But I really do want to be on record. They are working constructively on a regulatory framework and solutions here. They keep being put in a bad position, principally, frequently by the chairman of the SEC, Gary Gensler, who keeps going into court and losing. He's been told by federal judges that his rulings are arbitrary and capricious.

I don't know any lawyer before any bar in America who wants to have on their resume that a federal judge says that what you wrote is arbitrary and capricious. Hester Peirce, please read what Hester writes. Hester is a republican commissioner on the SEC. She has a marvelous writing style, and she's a very effective economic policy thinker. So she is a great voice inside the commission for common sense.

David Hoffman
Representative Hill, we never miss a Hester purse dissent. She's fantastic. I think she'd do a fantastic role in that job of chairman of the SEC herself. Well, let's go back and tie the loop on fit 21. So this is for bank listeners that know about this.

This is a major pro crypto bill that clarifies basically which crypto assets are securities and which are commodities. Some clarity to the industry. So we don't have this power vacuum and a power grab by rogue regulators at the SEC or some other administration. Passage you were talking about was a passage by the House, and it was another historic vote. It was bipartisan.

So 71 Democrats in the House joined 208 Republicans to pass this. I'm kind of confused, though, as to what the process is now. So passed the House, and now it's in the Senate. So kind of like, now what we were sort of hoping. I think a lot of people on the back of sab 121 thought, okay, now that now the Senate votes, and then, you know, Biden has a chance to veto or let it pass, but it seems like it's stuck in the Senate.

Like, can you just give us some insight into the procedure, what has to happen there? Does a senator have to kind of pick it up. Do they have to re craft it? Like, how close are we from this getting to the president's desk? Super questions.

Representative French Hill
And this is where everybody in the venture ecosystem in and around blockchain and crypto can be helpful. That is a strong, definitive bipartisan vote, and you combine it with the staff accounting bulletin. That's why I'm glad you started there. Both those send a market signal that the House has done their homework, they've done their education, they've reached consensus, and they've moved a product forward. And I would say the same is true on stable coins, but we have not taken that across the House floor for a vote.

But I do, I want to be clear that I think we've also found that consensus around payment stable coins as well. All right, the Senate has the following choices. They can introduce their own bill. And as you know, senators Loomis and Gillibrand have had legislation pending. Senators stabideau and Bozeman had their hearing on the commodity aspects of this last week.

So they can introduce their own legislation. And both Stabenol has been working on a bill. Loomis and Gillibrand have some legislation draft. Senator Vance, the new republican vice presidential candidate, was in the process of looking at a crypto bill in the last few weeks. Secondly, a senator could introduce fit 21, the House passed version.

No one has done that, but certainly people from the venture community could encourage it and any combination of those. They also could add a stablecoin bill, you know, into the mix as well, which was really the loomis Gillibrand approach. So, yeah, we're caught a little flat footed now because we've done our work. We have only a few weeks left in this Congress, and the Senate just doesn't have very many legislative days left, you know, but we're going to work our tails off to find a bicameral, meaning House and Senate approval of something in this realm before the end of this Congress, which ends at December 31 of this year, including a big lame duck session after the presidential election. We'll be pushing all during September, last two weeks in July and all of September.

But time is short. If for any reason we fail on stablecoins, fit 21, or rectifying the staff accounting bulletin, these will be the top issues when we go into the new congress in the new year. And I will be right there pushing and leading as soon as that Congress turns over. But I want to be clear on a podcast, I'm not giving up on this yet. We can't give up.

As John Boehner once famously said, the former speaker of the House Congress moves very slowly until it doesn't. So the fact that Sherrod Brown has indicated he might be interested in this topic. Chuck Schumer has said he's interested in this topic. Debbie Stabenow has had a hearing. You get the movement, but it may be too little, too late for this Congress.

But we're going to push hard and we need all of our friends who think fit 20 fund is a good market structure. First step. We need that help over in the Senate. It does seem like the winds have certainly changed. We've got some momentum.

David Hoffman
Whether it happens in this Congress or the next Congress, it's only a matter of time. Now I want to ask you about other critical areas that are still unaddressed from a legislation perspective. So we mentioned that the fit 21 clarity between the SEC, what are commodities, what are securities, that sort of thing. You've also mentioned stable coins. I know we're making progress there.

That seems to be like a chunk of legislation that we can do almost like the first generation. I'm kind of glad you call these, these products because that's sort of things is, you know, products. These, these bills are products for the american people. Let's hope so. What's the next generation of products after this?

It feels like we're still missing some clarity with respect to DeFi, the regulators want to treat all decentralized finance as if there's like intermediaries in between. So it feels like we need something there. Privacy has been an issue as well. I mean, do Americans have the ability to transfer something on a public blockchain in encrypted fashion or not? There are some other things that we really need to tie off as well.

What's kind of after, in the next generation of legislation you feel like we need to put forward so smart that. You phrased it like that. These are the, the initial steps. First of all, nationwide privacy law I think is very important. We've passed that out of our committee.

Representative French Hill
It is something that's percolating on both sides of the Capitol. This would be preemptive of state laws, create a national privacy standard, have some rights to data ownership, which I think is very, very important. You don't really have a digital future if you don't have your own, your own data. I would mandate the use of APIs. There's not consensus for that.

But these are the kinds of things that are in these building blocks, stablecoins and the regulatory framework. You don't go to the next steps in blockchain development if you don't do the basic fundamentals. And that's what I think these bills are. They are the fundamental building blocks of a digital blockchain related future. What's next?

We have in the fit 21 bill calling for a study on decentralized finance, how it would work, what are the pitfalls? What are issues? How does federal policy have to change to facilitate it? What are issues around it? And so we've already done one hearing on decentralized finance, and we'll be doing some more on that, on nfts and sort of non securities, non commodity, tokenized owned assets.

The bill's silent on that. So I can see some future hearings on that as well. It connects right back to data ownership, right back to privacy, right back to the use of a blockchain. And the third category, I would say, would be just expanding blockchain generally in an analog context. So that would be like tokenizing an existing security, tokenizing another asset class like art.

We started off the top of the show talking a little bit about, you know, illiquid securities or thinly traded situations. That's really true out in a number of asset categories that could be made much more transparent and effective on a blockchain from an auction point of view, documentation point of view, payment. So we're going to look at that. And there's a lot of experimentation with that in the markets right now. People aren't talking about it.

But I can assure you, wherever there is a high agency call situation with lots of stops in the people process chart, people want to disrupt that through the use of a blockchain operating system. I find that exciting. I think everybody benefits. Compliance officers benefit, consumers benefit, businesses benefit. So you'll see us continue this development beyond these foundational.

David Hoffman
That's great to hear. And at some level, just like the Internet, you're part of Congress's job is to know when to act and to know when to just let innovation flourish and let the experiments take hold. I want to ask you another question. This is somewhat of a nuanced question, but it's something that's been on our minds in crypto recently, which is, you know, over the past couple of years, we've had kind of like an operation choke point against crypto banks working with, with, with projects. We've had overreach by regulators like Gary Gensler.

Overall, it's been sort of an administrative state type of attack, I would say, on crypto that just like, hasn't felt very good, hasn't felt welcome for crypto entrepreneurs in the United States. We recently had a Supreme Court decision overturning Chevron deference, which is very interesting. So we've done entire episodes on this, but the short version of it is this is a reign and a check on the power of the regulatory administrative state and the regulators kind of imposing their will. But this power essentially gets transferred back to Congress, and it's now on Congress to make sure they put the proper legislation in place to kind of fill in the gaps where necessary. And I guess my question I'm kind of like, I would love to ask this of everyone who works on behalf of the american people in Congress, but since you're the representative in front of us today, is, is Congress equipped to do this well and are you going to, how can you make sure you do this well and how can you avoid a failure mode of other regulators, kind of like working, or even lobbyists outside sort of working with Congress and crafting bills in their favorite.

I just. How's your overall assessment of how Congress can put together legislation for something that is new and innovative like crypto? Because now this is really what, like in the wake of Chevron deference being overturned, this is really what we need Congress to do. Well, you've got a live action observation of this in place right now, watching the last three and a half years of Chairman Gensler's Sec. He's creating rules by enforcement.

Representative French Hill
He's telling people, just come in and register the 40 act and the 33 act and the 34 act. They're all welcoming to you. Please come forward, meet with my world class team, and we'll take good care of you. Of course. Nonsense.

And then he's interpreted the Howie test, which is a famous 1940s securities case that outlines what are the, I'd say, distinguishing characteristics of something that is a investment contractor is clearly an investment. We've legislated that in fit 21 and a whole process around it, in fact, giving authority to the commission to play a major role. That's how Chevron should work. You don't just get to make up the rules and assume that they have the full faith and credit and responsibility and authority of Congress without a congressional direction. And so in Congress, fit 21 is precisely what we want to see Congress do, which is take a troubled area where the agency tends to want to write its own rules that are not in keeping with the core statute of the SEC, and we are going to direct them in the right direction.

That's what Congress should be doing. We've 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 with periodics of victory. The Carter deregulations in the seventies, the Reagan deregulations in the eighties. Although the Chevron case itself is a 1984 case, the famous justice of the Supreme Court, Scalia, Anton Scalia, said it was the worst decision he'd been a part of and spent the rest of his life regretting it. So we need to go to work in Congress in each of our areas of jurisdiction and reassert congressional direction and control.

It will not be easy to do, but it's absolutely doable. And I actually think what we're doing right now with the commission and with the CFTC around crypto and digital assets is a prime example, a good working example of it. Representative Hill, thank you so much for your time today, and thank you for your work in Congress on behalf of the american people and representing crypto. I have a final question for you as we close this out. So 2024, cryptos actually seems like it's become an election issue.

David Hoffman
We've got President Trump coming out and saying he's going to be the crypto president. He's actually going to a bitcoin conference later this month, and I'm sure the security on that will be extra tight. Also, we talked about JD Vance, the vice president nominee, is being crypto friendly. We haven't yet seen crypto come up in a debate, but perhaps it will. So let's forecast to the elections.

What's the impact of the elections going to be on crypto and America's position, the us government's position on crypto? Of course, we don't know what the outcome is going to be. Congress could swing in one direction or another. The White House could swing in one direction or another. But with some of these eventualities, what do you kind of predict about the impact of the elections for crypto related issues?

Representative French Hill
Well, first of all, we've spent four or five years educating members of Congress, the staffs in Congress, policymakers around Washington, DC, on the importance of blockchain, how crypto or tokenized payments can work, and the benefits to the economy. Pro innovation, pro economic growth, pro capital coming back to America, pro bringing innovation here, letting us set the standard on what a good payment stable coin is backed by the us dollar. Let us set the standard on what a regulatory framework looks like, not Dubai. Come on. That's my Joe Biden invitation.

Come on, man. You know, this is ridiculous. We should be leading here. And I think 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 because of the education that we've delivered in Congress and that the whole ecosystem across the nation has helped deliver by describing the benefits, the use cases for an operational blockchain to benefit consumers and business, benefit compliance officers, benefit anti fraud folks, anti money laundering people. So I think we've really done a good job. I'm optimistic about that. I think President Trump, this would be one of the first bills we could get to his desk, if he's elected president, to sign into law if we don't finish our work, work this year. And I definitely think that a Trump Vance presidency would lean more favorably towards the work we're doing.

But clearly, in the Biden administration, we've talked about it now for a few minutes. They're not fully on the same page. Even if they set up the work and have been constructive on the framework, on stable coins, it's not been done with a lot of coordination or enthusiasm from all aspects of the administration. So let's keep the faith. Let's know that good days are ahead and that this is a real bright spot.

And let's make sure we think about blockchain like we thought about the Internet in the nineties. Let's let it flourish, and we can regulate and tax people with what they do on it, but not block them from trying. And that's why I'm so convinced we're in the right direction. Well said. As a child of the nineties, I say we should bring back the nineties with respect to America's posture and the Internet, to crypto and lead the world once again.

David Hoffman
So, Representative Hill, thank you so much for being with us. I will say to bankless listeners, of course you should get involved politically. All right? And if you want to get involved and want to see where various political candidates stand on crypto, you can go to the stand with crypto website. We'll include a link in the show notes.

I will end with this. This, of course, none of this has been financial advice, not even political advice. Crypto is risky. You could lose what you put in. But this is the frontier.

It's not for everyone. We're glad you're with us on the bankless journey. Thanks a lot. New projects are coming online to the mantle, layer two every single week. Why is this happening?

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