Patrick McHenry, ranking member of the United States House of Representatives Financial Services Committee, thinks the “conversation has become unmoored” regarding financial technology and needs to return to solving real-world problems. He is currently in talks over legislation that may at least bring more clarity to stablecoins.

Currently, there is no U.S. federal definition of digital assets or stablecoins, McHenry said, calling the situation “retrograde.” McHenry, House Financial Services Committee Chair Maxine Waters and the Treasury Department have been in negotiations for months on legislation to regulate stablecoins “in an election year, in a divided Washington.” He spoke positively about the bipartisan nature of the legislation taking shape and tradeoffs that have been made between himself and Waters, and said:

“We agree on the asset, that is, a narrowly defined set of assets, 1:1 backing, no leverage. [..] Then we get into more complex conversations.”

Speaking at DC Fintech Week, McHenry named “the means by which we hold” stablecoins, regulating wallets and determining the federal regulator for them as outstanding questions. Those decisions are “less science, more art,” he said. The resulting draft is “a pretty ugly baby,” according to McHenry, who added that it may grow into something more attractive.

Related: Republican lawmakers call for answers on digital dollar from Fed vice chair

McHenry has said that, if he becomes chair of the Financial Services Committee after the midterm elections, he would make crypto regulation a priority. McHenry could become chair of the committee if the Republican party gains a majority in the House. He has been a longtime advocate of bipartisanship in crypto legislation.

Current panel with Patrick Collison and Patrick McHenry about fintech’s post-pandemic scorecard. #DCFintechWeek pic.twitter.com/cPASNRJBCN

— Michael Frye (@_mfrye) October 12, 2022

Waters, who addressed the conference briefly a day earlier, also mentioned stablecoins and the question of digital wallets. She stressed the need to make the technology user-friendly, especially considering that “People are often excluded from the traditional financial system.”

On Oct. 3, the Treasury Department’s Financial Stability Oversight Council urged lawmakers to pass legislation to assign regulatory responsibility for crypto to regulators. There are numerous bills seeking to regulate crypto, including the Digital Commodities Consumer Protection Act of 2022 in the Senate and, in the House, the Lummis-Gillibrand Responsible Financial Innovation Act and the Digital Commodity Exchange Act of 2022.