“Why isn’t this a TV show already?!” This is a common question on Capitol Hill when it comes to crypto policy. Considering the zany characters (in politics and crypto), bombastic lines of questioning at congressional hearings, gaffes which turn into meme tokens and constant media frenzy – crypto is a policy realm unlike any other. The topics are complex, the news cycle is relentless, and the challenges to solve are daunting, which is why crypto policy is not for the faint of heart. The stakes for the industry couldn’t be higher, and “Congress and Crypto: Season 4” is shaping up as the most consequential yet. In describing this show, it’s helpful to break down the previous seasons.
Season 1 (2016-2018) takes place in WeWork offices and stars lobbyists at CoinCenter and the Blockchain Association. For a relatively new industry, these two organizations have been around the longest. The handful of tech and privacy-focused policy wonks spend their days strategizing how to break down the complex topic of cryptocurrency to members of Congress who are double their age and the Capitol Hill staffers who are half it.
Season 2 (2019-2021) takes place on the heels of the announcement of Facebook’s Libra project and ends with the infamous “infrastructure fight” episode. During the climax, the industry rallies together to attempt to defeat a crypto tax provision tucked into President Joe Biden’s hallmark legislation, the bipartisan infrastructure bill. The cast of characters grows into an ensemble, and each crypto faction splinters the ecosystem further.
Season 3 (2022) brings a new set of major players, and none is more important than Sam Bankman-Fried – a personality so large that he’s known only by his initials, SBF. He paints himself as the savior of the crypto industry and aggressively positions himself in front of Congress and regulators in every corner of Washington, D.C. In the end, however, SBF turns out not to be crypto’s white knight but the season’s villain. The collapse of his FTX crypto exchange and ensuing contagion wipes out several companies, and leaves one-third of all U.S. policymakers frustrated and embarrassed for having taken donations from an alleged fraudster.
Season 4 (2023) is shaping up to be the most memorable yet, with drama in both the speaker’s race and crypto policy. The industry is at its lowest point in the show’s history as the damage done by FTX’s collapse continues to reverberate. Relationships are tarnished, skeptics are more emboldened than ever and, in some cases, crypto is seen as politically toxic. Divided control of Congress provides opportunities for the industry, but it will take dedicated negotiations, education and political power to move anything. Fortunately, these are familiar challenges for the industry; every step in crypto policy is a brutal, bruising slog, but that is also what makes the back and forth so fun to watch.
This season will include new characters including former Treasury employee Rep. French Hill (R–Ark.) and Rhodes scholar Rep. Jim Himes (D–Conn.). These members, and several others, are seen as some of the sharpest minds in Congress, their backgrounds in traditional finance. While they approached crypto in seasons 1 and 2 with pronounced skepticism, they have gravitated toward issues that blend the two realms, such as stablecoin regulation.
Rep. Patrick McHenry (R–N.C.), now chair of the House Financial Services Committee, has expressed interest in market structure legislation and parameters around stablecoin issuers. Dealing with those two issues may garner a hefty amount of support from both sides of the aisle. In the other corner stands Sen. Sherrord Brown (D–Ohio), McHenry’s crypto polar opposite. While it’s difficult to see either protagonist finding common ground on sound crypto policy, many of the promising bills introduced in the 117th Congress were bipartisan.
Season 4 will also see the departure of many characters in Washington. Cabinet secretaries will depart, companies will shed their lobbyists, organizations will falter in the bear market and policymakers will pivot to other more pressing concerns as the year progresses. Regardless of those comings and goings, crypto is here for good. While the craziness of the day-to-day news is what makes this sector attractive, crypto has also proven to be resilient as an industry, and its main characters relentless.
– Ron Hammond, director of government relations for the Blockchain Association
@RonwHammond
