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Sen. Bill Hagerty (R-Tenn.) provided a sneak peek of the anticipated backlash that U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler is set to face as Congress reconvenes after its summer recess. In a speech delivered on Thursday, Hagerty accused the regulator of hindering the progress of cryptocurrency innovation.

He, along with fellow senators from the Senate Banking Committee, will have the opportunity to directly interrogate Gensler next week during a scheduled hearing on SEC oversight set for September 12. However, this doesn't satisfy Hagerty, who expressed to an audience at the Cato Institute that the Democratic-led committee should consider organizing additional hearings focused specifically on scrutinizing the actions of Gensler and the SEC concerning the U.S. cryptocurrency sector.

“It is a terrible environment,” said Hagerty, who pushed crypto legislation in 2022 to set up basic guardrails for stablecoins, though it never advanced. “For those companies who are trying to invest and expand, it's forcing them to look overseas to more favorable regulatory environments. That's not where we need to be right now.”

Hagerty expressed concerns that Gensler's contentious stance toward cryptocurrency is having a detrimental impact on the industry. However, he also took issue with U.S. banking regulators for fostering an environment within the banking sector that instills caution when it comes to engaging with cryptocurrencies.

He refrained from speculating on which of the ongoing crypto legislative initiatives were most likely to succeed, but he advocated for a gradual approach in Congress, suggesting that they tackle smaller components rather than pursuing a comprehensive strategy. He emphasized that this was the primary objective of his two-page Stablecoin Transparency Act, which aimed to establish straightforward rules promptly.

The Senate Banking Committee, under the leadership of Senator Sherrod Brown (D-Ohio), holds a pivotal role in shaping the future of crypto legislation. Interestingly, the senior Democrats on this committee have maintained a certain level of discretion regarding their intentions. In contrast to the House Financial Services Committee, which has pushed forward crypto-related bills for consideration in the opposite chamber, it remains uncertain how Senator Brown's committee will handle these proposals.