Rep. French Hill, chairman of the House Financial Services Committee, told CoinDesk that tokenization represents the next major policy focus for the committee after stablecoins and market structure legislation, with bipartisan support expected to carry forward into this new phase of digital asset regulation.
Market Context
The House Financial Services Committee has emerged as a central player in Congress on digital asset policy, having previously advanced both the stablecoin-focused GENIUS Act and the market structure-focused Clarity Act. The committee passed its version of the Clarity Act with 78 Democratic votes in the House last year, demonstrating significant bipartisan reach on crypto legislation.
Hill noted that Senate negotiators have been heavily relying on House work product as they develop their own legislation, referencing both FIT21 from the previous Congress and the current Clarity Act framework. Both Hill and Rep. Bryan Steil, who chairs the House Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, have maintained communication with senators working through the Clarity Act markup process.
Analysis
The committee held a hearing on tokenization in late March aimed at helping lawmakers understand what additional authorities or rules the Securities and Exchange Commission (SEC) and bank regulators might need to facilitate companies engaging in tokenizing real-world assets. Hill emphasized that determining whether legislative action is even necessary remains a key question, as some aspects of tokenization may be addressable through regulatory channels alone.
Tokenization of an asset such as common stock represents changing systems rather than changing law, according to Hill. He argued that existing legal and regulatory requirements for traditional securities would apply equally to tokenized versions of those same assets, making the transition primarily operational rather than substantive.
The committee is also examining potential tokenization of deposits in the commercial banking industry, which could enable direct debit payments without needing an intermediated stop. Hill drew parallels to historical financial system evolution, noting that markets progressed from call-out markets to paper-based systems and then to digitization during the 1970s and 1980sāa shift that increased accuracy, reduced fraud, increased speed, decreased liquidity needs, and improved settlement times.
We went from T+5 on equities in the 1970s to T+1. So to me, this is an operating decision, and the interoperability of it is the biggest challenge, not the mechanical, technical aspect of doing it, Hill said at the Digital Assets and Emerging Tech Policy Summit hosted by Vanderbilt University and the Blockchain Association.
Tax policy remains another major focus area for crypto legislation, with the House Ways and Means Committee already working on digital asset tax issues. A bipartisan group of lawmakers reintroduced a bill specifically targeting crypto taxes earlier this month.
Key Numbers
- 78 Democratic votes secured in the House for the Clarity Act version last year
- T+5 settlement standard in equities markets during the 1970s, reduced to T+1 through digitization
- Estimated 12-month joint rulemaking process between CFTC and SEC if GENIUS rulemaking succeeds and Clarity passes
What to Watch
The upcoming oversight hearing with federal bank regulators scheduled for Thursday at 14:00 UTC (10 a.m. ET) will provide insight into how regulators are preparing for potential tokenization frameworks. The ongoing Senate Banking Committee markup of the Clarity Act counterpart legislation remains a critical development to monitor.
Progress on GENIUS rulemaking and Clarity passage will determine whether the joint CFTC-SEC rulemaking process Hill described moves forward, which would shape crypto regulation implementation over roughly a 12-month period. The November 2026 elections will also play a significant role, with crypto industry political engagement expected to be heavily directed at primary races to support candidates viewed as pro-innovation across both parties.