'Gensler will be gone.' Here's why Democrats are getting on board the crypto train.

By Chris Matthews

Former Democratic Rep. Tim Ryan says crypto is gaining traction in his party

The crypto world was pleasantly surprised when scores of Democrats voted to approve an industry-backed regulatory bill last month that signaled a burgeoning bipartisan consensus that the digital-asset sector is here to stay.

Former Democratic Rep. Tim Ryan of Ohio told MarketWatch that the surge in support for new, custom regulations for crypto was evidence that his former colleagues were finally starting to pay close attention to the issue, rather than deferring to the Biden administration and financial regulators.

The lower chamber voted to approve the Financial Innovation and Technology for the 21st Century Act by a vote of 279 to 136, with near unanimous support from Republicans; 71 Democrats voted in favor of the bill.

Congress "is supposed to oversee the executive branch," Ryan told MarketWatch in an interview Wednesday, adding that the House committee structure is "organized in a way that our committee members becomes experts and in most instances outlast executive branch appointees."

One Biden appointee who has been skeptical of the need for custom crypto regulations is Securities and Exchange Commission Chairman Gary Gensler, who came out forcefully against the House passed measure in a statement the day of the vote.

Industry lobbyists say Gensler has been influential among Democrats, as sometimes lawmakers defer to regulators of their party for their expertise on esoteric subjects like financial regulation.

"Gensler will be gone in a year or two and these members of Congress charged with the Constitutional obligation to set the direction of the country for the next decade or two," Ryan said. "I'm very proud of my former colleagues who stepped up and showed some real leadership."

Gensler's term leading the SEC is scheduled to end in June of 2026.

Ryan serves on crypto exchange Coinbase's (COIN) Global Advisory Council and worked to educate his former colleagues on the intricacies of crypto policy and what the industry may be able to achieve for their constituents.

He noted that fellow Democrat Rep. Steven Horsford of Nevada, Chair of the Congressional Black Caucus, voted for the FIT-21 bill, evidence that there is a growing belief that crypto can help unbanked Americans in minority communities connect to the financial system.

Crypto's potential to lower the cost of sending remittances to relatives abroad got the attention of Democrats in the Latino community, like California Rep. Pete Aguilar, chair of the House Democratic Caucus and top-ranking Latino in Congress, he argued.

"We have a [crypto]-mining facility here in Ohio that was built by organized labor," Ryan said, adding that he sees promise for labor-friendly lawmakers to back crypto for its potential to boost the building and construction trades.

Ryan's comments were made in the wake of a new report from Coinbase that highlighted growing interest from Fortune 100 companies to experiment with crypto and blockchain technology, including PayPal Holdings Inc. (PYPL), JPMorgan Chase & Co. (JPM), and BlackRock Inc. (BLK)

"So now you've got the Black community, you've got labor, you've got the Latino community, and you've got kind of progressive, innovative CEOs," Ryan said. "That's a hell of a coalition."

-Chris Matthews

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06-13-24 1306ET

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