Crypto-friendly Rep. Patrick T. McHenry will temporarily take over as Speaker of the House of Representatives following the dramatic resignation of California Republican Rep. McKenzie on October 4. Rep. Patrick T. McHenry of North Carolina, who took the gavel, may oversee the selection of a new speaker. But he will not have the power to run the chamber.

Below is a detailed analysis of how the current chaos in the U.S. Congress affects U.S. cryptocurrency legislation.

Who is Patrick T. McHenry?

Before McHenry was ousted, most people had not heard much about Patrick T. McHenry, the bespectacled, bow-tie-wearing gentleman from North Carolina whose legislative focus was primarily on fiscal policy. But he was somewhat well-known in the crypto community, most notably for his message to SEC Chairman Gary Gensler: "If Gensler continues to ignore regulatory requests, he will receive a subpoena. I don't think you want to be the first SEC Chairman to receive a congressional subpoena."

This is not the first time that they have been at loggerheads. At the "SEC Oversight" hearing, McHenry asked Gensler, "Why is Bitcoin not considered a security?"

Additionally, during his tenure as chairman of the House Financial Services Committee (this summer), he introduced two bills to regulate cryptocurrencies (the Payment Stablecoin Transparency Act and the SAVE Token Act) as well as a bill targeting stablecoins.

But now he is thrust into the spotlight as speaker pro tempore, the reluctant leader of a paralyzed House.

Patrick T. McHenry is a 10-term congressman and former member of the House Republican leadership, a position he resigned from after the Republicans lost the House seat in 2018.

  • Now chairman of the House Financial Services Committee, he gained more attention during the recent debt-ceiling negotiations and averted a government shutdown as McKinsey’s appointed liaison to the White House.

  • He is a classic fiscal conservative who proudly declares in his House biography that he has “never voted for a tax increase in his career.”

  • Now, he is the House speaker pro tempore, a placeholder role that essentially serves as temporary speaker while the Republican majority decides on the next steps.

'The House remains frozen'

McCarthy was ousted in a power struggle with far-right lawmakers, including Florida Republican Congressman Matt Gaetz.

Every speaker creates a list of successors when he or she takes office, and McHenry's name was first on McCarthy's list.

The U.S. House of Representatives remained on virtual freeze as Republican unrest fueled chaotic planning over who could take over leadership of the chamber, with GOP members meeting with potential speaker candidates and speaking with different factions of the party on Wednesday.

"In this case, this could go on for weeks," Louisiana Republican Rep. Garret Graves said as he walked off the House floor amid competing sessions.

McHenry intends to hold a forum for speaker candidates on Tuesday, a week after McCarthy is ousted, meaning a new speaker won’t be chosen until that day at the earliest. In the meantime, other House operations, including any legislative business, are likely to come to a halt.

"We are facing an unprecedented situation right now where the House is effectively frozen," said Representative Garret Graves.

“It’s a blank slate. So the limitations or the authorities are really unknown,” Graves said, “so people are trying to figure out how to build the aircraft as it flies.”

Cryptocurrency legislation stalled

The House of Representatives is frozen, and this could waste precious time needed to push the cryptocurrency bill closer to the finish line.

In July, McHenry’s committee just introduced two bills that are awaiting a vote in the full House before being passed to the Senate. One of the bills would regulate stablecoins, while the other would take a comprehensive approach to creating a regulatory framework for cryptocurrencies; even if they end up getting a vote in the House, they still need to gain support in the Senate, which could be difficult.

“These bills are just sitting there and there’s really nothing we can do about it,” said Ron Hammond, director of government relations at the Blockchain Association. “It’s an unfortunate situation where we’re kind of at a standstill right now.”

The House will be forced to vote on a new speaker, but it is unclear who will win enough votes to win the position.

McCarthy said he would not run for speaker again. Majority Whip Tom Emmer (also a crypto-friendly congressman) told reporters he would not run. House Majority Leader Steve Scalise (who has no involvement in crypto) said he did not have any announcements to make at this time.

Members told reporters they expect to hold a candidates forum next Tuesday before voting on speaker, which could take place as early as Wednesday.

House rules do not explicitly prohibit a speaker pro tempore from exercising the powers of an elected speaker. But former House General Counsel Stan M. Brand said: "The rules that led to McHenry's elevation were written with a temporary absence in mind, not with a vacant seat in mind. This leaves legal room for Mr. McHenry to exercise broader powers, such as conducting legislative business, if he so chooses."

During this "gap period," it is unclear whether McHenry will conduct legislative business during his tenure as interim speaker, but partisan disputes have indeed affected the progress of encryption legislation.