Mike Flood is rocking Congress on cryptocurrency.

Republican Representative Mike Flood, a soft-spoken second-term lawmaker from Nebraska, may seem like an unlikely candidate to pull the strings when it comes to cryptocurrency policy in Congress. Still, he played a central role in May when his colleagues took a historic step by voting for the first time to pass two measures that would regulate the industry.

It was the culmination of a floodgate effort that, along with a handful of colleagues, won incredible bipartisan support for both the 21st Century Act (FIT21) and Financial Innovation and Technology. Another proposal to repeal the Securities and Exchange Commission Act, known as SAB-121.

“If you had told me we would get 71 votes from House Democrats, I would never have believed it,” Flood said in an interview with Cointelegraph, referring to the FIT21 vote. The measure would allow cryptocurrency projects to “prove” that their tokens are commodities — moving them away from SEC regulatory oversight and into the Commodity Futures Trading Commission.

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After the 49-year-old flood won a special election in 2010 He joins Congress in July 2022, which means he has little leverage over his colleagues at first. But he previously served in the Nebraska Legislature for nearly a decade, including six years as its speaker, which gave him a bit of an edge in experience — and played a role in sparking his interest in the crypto industry.

Cointelegraph: What sparked your interest in cryptocurrency?

I started as a member of the Nebraska Legislature's Banking Committee, putting together what I called Flood: The Nebraska Financial Innovation Act. And of course there was a bill to allow Nebraska to issue a stable coin, and it became a real lesson because I'm with all the bankers. In the year It was a new concept in 2021. But for the better part of a year,

I learned a lot and am excited about it. When you talk to a business student at the University of Nebraska, digital assets is where they want to be, that's what they want. He is going there. And as a believer in states' rights, I like the idea that states are laboratories of democracy.

I want to make sure that we maintain our dual-banking system so that you have federally chartered banks or federally chartered institutions that issue stablecoins and hold digital assets — but state-based charters.

And that really got me into it. When I got into the US House, I wanted to be on the Financial Services Committee, and I started organizing the Flaiver FinTech conference last year.

CT: Nebraska is not a place where most people would think crypto is a big topic. How much do you hear from your constituents about it?

Flood: It's on the radar. Everyone knows about Bitcoin, and sometimes it blows the air out of the room because they don't see beyond that. But I can tell you young people who didn't grow up with 50 years of fiat currency – they take to it really quickly.

I think one of the things that has happened in Nebraska through this process is that our banks understand that we give them the power that some of their customers want. And I think a lot of bankers — especially in rural areas — are concerned about how many people are investing in digital assets. They realize that this asset class is something they have no exposure to, and they want to be full service.

One of the great things about states like ours is that community banks are central to our future. Customers want to provide the services they want, and more and more people are getting involved in cryptocurrency.

At the end of the day, after a lot of education and a lot of negotiation, we put a system in place and, you know, our banking department in Nebraska embraced this 100% and started adding human capital. For the room to be able to control this properly.

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I think it's a bright spot in states like Nebraska, and if we're going to attract the right talent, we need to be at the forefront of things like this.

CT: Are there any congressional newcomers that crypto advocates should keep an eye on for the upcoming election?

Flood: There are two people I'll pick up right away. Rep. French Hill (R) has banking experience. He worked in the treasury. He was the CEO of a very large bank in Arkansas. I'd love to see him and Rep. Warren Davidson (R) in the same room. He is a tough fighter. He's a believer in digital assets, he's smart enough that the days are long, he gets it.

And of course Warren is a privacy advocate. He is a ‘get the government out of my backyard' advocate. He embraces DeFi and understands the issues and it's exciting to be on the Digital Assets Subcommittee, sitting with the two ends of the books and creating policy.

You know, I'm actually surprised that FIT21 hit the floor before statscoins, because last year most stablecoins were where I spent most of my time. But I'm glad FIT21 is where it's at, and I hope they get a stable coin behind it soon.

CT: Congressional Democrats are split on where they want to go on crypto policy. What was it like working with them recently?

FLOOD: Well, if you had told me that we would get 71 votes from House Democrats to pass FIT21, I never would have believed it.

In our CRA we got 21 votes to carry the President in SAB-121. I was hoping for 8-10. We went through the numbers again and again and found the former speaker [Nancy] Pelosi tells you that change is coming. Calvary is coming.

And that's not what Republicans do. Americans are moving here. The biggest banks in the country – BNY Mellon and many others – have been in the business of holding people's assets for almost 200 years, and they don't want to be sidelined.

Many members go to CODELs [congressional delegations] Countries like Singapore and the Emirates and the European Union and they're hearing about the digital asset frameworks that are being set up there and they're coming back to Congress and saying, “Why – as a global superpower – is financial services – not even in the game?”

I think it's very organic. I don't think any member of Congress can take credit for what has changed. People are accepting it and members are starting to respond.

CT: What do you think about congressional investment regulations? A new app (Autopilot) launched last month that allows Americans to record business transactions made by members of Congress. Is this situation sustainable?

I can tell you that I have never invested in anything crypto related. I am also on the subject. So for me, it's not something I do, but it's something we have to look at. Industry regulators should not actively invest in what they regulate. I'm not involved in the list of policy discussions.

There may be different approaches, but we must ensure that members of Congress do not trade on insider information. At the end of the day, that doesn't help anyone and it's not right. It is not ethical.

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In terms of my interest in the matter, for me, I have nothing to do with it. I feel that gives me the ability to throw myself into these issues and make good decisions about what our policy should be.

What I love about crypto right now is that the good players in this space are running to Congress looking for regulation. Bad actors don't want anyone. Good actors need a safe, healthy platform, and we don't have to build belt-and-suspension rules and regulations and rules. Just in the year We need to build a good foundation for the Internet like we did for the Internet in 1995 and then, you know, make future improvements and do something that doesn't stifle innovation.

CT: What do you think the next Congress — likely working with President Trump again — will focus on in this area?

Flood: Well, success will be passing the bill of FIT21 and stablecoins. That would be a start. I think at the next Congress, we need to really understand artificial intelligence and play in that space. We need to be concerned about cyber security.

As far as crypto goes, hopefully after we pass FIT21 and the Stable Coin Act, we will have a comfortable executive body that can write laws to guide us. What I've learned in Congress is that you can make laws, but the laws are what you really have to pay attention to, and making sure the laws are consistent with the intent of Congress becomes a full-time job. The devil will be in the details.

My understanding is that if we pass those two bills, the 119th Congress will look at enforcement by agencies to ensure that the laws don't stifle innovation and protect consumers.

CT: Explain what you want to do with stablecoins.

Flooding: We were working with Bill. [House Financial Services Committee] We are negotiating with Chairman Patrick McHenry (R) and member Maxine Waters (D) to date. My biggest issue with a stable penny bill — and something I hope doesn't get watered down — is that we have to have a state road. This is a hill to die for.

You cannot remove states from here. It limits creativity. It's a slap in the face for states like New York that have some of the best regulators in the financial services space. And on any given day, I worry that that's what someone wants to trade it for – an overburdened and immobile federal stablecoin regime. And this is not where we should be.

Let the state-chartered banks do that – you know, keep a stable coin and invest in a stable coin. That's part of the beauty of America and part of the beauty of our financial system. It is very diverse.

We have G-SIBs (Globally Important Banks), Regional Banks, Community Banks, Federal Banks and State Banks. And they don't have that in Europe. Most places don't have that. That's what makes us so flexible. I'm not opposed to a federal role in regulating many state-chartered banks, just like — now — the FDIC.

The issue of territorial rights. States are laboratories of democracy. Regions are theirs. We all compete for growth and opportunity and economic growth in the knowledge economy, and I feel that in the name of “security” there are those who think that some governments are incapable of understanding digital assets, which I think is disgusting.

Nebraskans know how to run good banks. Our banks will fail. In fact, our P.P.P [Paycheck Protection Program] The program works well with community banks.

People are no smarter in Washington than they are in Lincoln, Minneapolis, Des Moines, or New York. And if I was the DFF of New York [Department of Financial Services], I'm happy with the idea that the federal government can't adequately protect consumers in New York, one of the largest financial centers in the world. But there is this top-down mentality. [in Washington] That they should have a thumb on everything.

This interview is packed with length and clarity.