House Financial Services chair signals tokenization is next big crypto priority after Clarity Act Rep. French Hill, who chairs the House Financial Services Committee, told CoinDesk he expects the Clarity Act to secure bipartisan backing and that tokenization of real-world assets will be the committee’s next major focus — a sign that Congress is preparing to move beyond stablecoins and market structure into the nuts-and-bolts of how financial assets get represented on blockchains. Why it matters The House Financial Services Committee is one of the few Congressional bodies with direct oversight of federal regulators shaping digital-asset policy. Under Hill’s leadership — following the retirement of former chair Patrick McHenry — the committee helped advance stablecoin-focused legislation (the GENIUS Act) and the market-structure-oriented Clarity Act. How it handles tokenization could determine whether regulators or new laws become the primary path for integrating tokenized securities, deposits and other financial instruments into the U.S. system. Bipartisan groundwork and Senate coordination Hill pointed to the bipartisan progress the House made last year on issues such as stablecoin sale practices and decentralized finance, noting the House’s Clarity bill drew 78 Democratic votes. He told CoinDesk that Senate negotiators have been borrowing from House language — citing prior work like FIT21 and the current Clarity text — and that House and Senate teams have kept each other closely informed as they refine legislation. Why tokenization is on the agenda The committee held a hearing on tokenization in late March to help lawmakers evaluate whether regulators — particularly the SEC and bank supervisors — need additional authorities or rules to enable safe, compliant tokenization of real-world assets. Hill framed tokenization largely as an operational shift: turning existing assets into digital representations is “an exercise in changing systems,” he said, not a change to legal rights. In his view, the same legal and regulatory obligations that apply to traditional common stock should apply to a tokenized version. That distinction matters because it suggests Congress is trying to map existing legal frameworks onto new technical models rather than create a parallel regime. Hearings give members an opportunity to probe how agencies could adapt oversight, and whether Congress should step in with statutes or leave details to regulators. Bank deposits, settlement efficiency and interoperability Hill also flagged the tokenization of bank deposits as a topic worth exploring. Tokenized deposits could, in principle, enable direct debit-style payments without traditional intermediated stops. While he stressed such developments aren’t imminent, he likened tokenization to earlier digitization waves — from paper to electronic systems in the 1970s and 1980s — that dramatically improved settlement speed and accuracy (moving from T+5 to T+1 for equities, as an example). For Hill, the tougher questions aren’t the raw mechanics of tokenization but interoperability and compliance: how tokenized systems will interact with legacy systems, how settlements will be coordinated across platforms, and how regulators will ensure consumer protections and anti-fraud measures. Tax rules and broader political dynamics Beyond tokenization, Hill is watching tax-policy efforts closely. The House Ways and Means Committee is already working on digital-asset tax rules, and a bipartisan group recently reintroduced a crypto tax bill. Political dynamics also matter: industry engagement in this year’s primary and general-election campaigns remains strong, as it was in 2024, and could shape the next Congress’s appetite for innovation-focused legislation. A potential regulatory roadmap Hill said that if the GENIUS rulemaking succeeds and the Clarity Act passes, it would trigger roughly a 12-month joint rulemaking process between the SEC and the CFTC. That process, he suggested, would be an opportunity to translate the House’s vision of an “integrated, common, fit-for-purpose” approach into binding regulatory frameworks. Bottom line Congress is pivoting from stablecoin and market-structure debates toward practical questions about how tokenized assets will operate inside the U.S. financial system. Lawmakers appear intent on ensuring existing legal obligations carry over to tokenized instruments while also probing whether regulators need new tools or whether Congress should craft statutory changes. For industry participants, the coming months could determine whether tokenization advances through regulatory adaptation or requires fresh legislation — and how swiftly the U.S. moves to adopt tokenized markets at scale. Read more AI-generated news on: undefined/news