With less than three weeks to go, Patrick McHenry, a former congressman known for his involvement in crypto legislation, is predicting an eventful summer on Capitol Hill. He foresees a significant role for Tether in the stablecoin market in the U.S.

McHenry, now a senior advisor at a16z after spearheading last year's crypto regulations, believes that the current congressional landscape offers a promising opportunity for the industry to push for favorable laws. He anticipates a showdown between major stablecoin players like Tether and Circle regarding the future regulatory framework for U.S. stablecoin issuers.

During a recent webcast, Rostin Behnam, the former head of the Commodity Futures Trading Commission under the previous administration, highlighted that regulatory bodies often face delays in formulating and enacting rules even after legislative actions by Congress.

Both ex-officials emphasized that there is still substantial groundwork needed concerning U.S. crypto legislation but stressed that the time is ripe to address these issues. McHenry championed last year's Financial Innovation and Technology for the 21st Century Act (FIT21), which has laid the groundwork for ongoing efforts in Congress related to crypto market structure.

While expressing optimism for progress in shaping laws governing digital assets, McHenry cautioned against disrupting products aiming to be dollar-based internationally. Acknowledging the complexity of drafting highly technical policies into law, he noted that translating concepts into actionable legislation requires meticulous deliberation among lawmakers.

Author of Crypto Bills Now Being Rehashed Predicts 'Wicked Hot Summer' in Congress

Patrick McHenry, the ex-lawmaker who championed last year's crypto legislation, also said he expects a role to be found for Tether in the U.S. stablecoin field.

• Patrick McHenry, the retired congressman who led the charge on crypto legislation in the previous session and is now a senior advisor at a16z, said the industry has an opportunity to get good law under the current makeup of Congress and should seize it.
• McHenry sees a battle brewing between stablecoin giants Tether and Circle on the final outcome of the law that will govern U.S. stablecoin issuers.
• On the same webcast, Rostin Behnam, the chief of the Commodity Futures Trading Commission under the previous administration, cautioned that the regulatory agencies take quite a while to write and implement rules even after Congress acts.

McHenry acknowledged challenges in aligning with former Securities and Exchange Commission Chair Gary Gensler on crypto policies but underscored that even with favorable legislation from Congress, effective implementation by regulators would require time. He projected possible delays in finalizing market structure regulations followed by extended periods for regulatory agencies to draft detailed rules.

As discussions continue around U.S. crypto regulations, insights from figures like McHenry and Behnam shed light on the intricate process of transforming legislative intentions into tangible protections for investors in this burgeoning sector.

"You shouldn't blow up an international product that desires to be dollar-denominated; I don't think that's a rational outcome," he argued, though the matter may take more months of negotiating among lawmakers. The debates over the meat of highly technical policies will eventually transition from "science to art" as lawmakers do what they can to convert ideas into law, McHenry said.

He was never able to get on the same page with former Securities and Exchange Commission Chair Gary Gensler to initiate crypto policies, and he offered a reality check for those now waiting for laws from a cooperative Congress: They'll also have to be implemented by the regulators.

"It's going to take a while," he said, starting with the market structure legislation that may still be several months away. "But then it kicks over to the harder part, where you're going to have the market regulators and the bank regulators writing rules, which often can take over a year, even at the quickest clip."

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