The FIT21 bill, despite the US House support, faces opposition from the SEC and President Biden, making its Senate passage challenging.
US Republican lawmaker Patrick McHenry emphasized the urgency for the Senate to pass the Financial Innovation and Technology for the 21st Century Act (FIT21) before the upcoming US presidential election on November 5, 2024. The House Financial Services Chairman, who will be retiring from Congress in January, articulated his concerns during an interview with Bloomberg’s Balance of Power, asserting the necessity for swift legislative action on crypto regulation.
The FIT21 bill, which aims to classify most cryptocurrencies as commodities under the Commodity Futures Trading Commission (CFTC) jurisdiction, passed the House on May 22. The bill saw substantial bipartisan backing, receiving votes from 71 Democrats and 208 Republicans.
“This should be a wake-up call for the Senate that they need to get on with this. They need to stay focused on getting policy here and get it done before the election,” McHenry remarked.
CFTC Preferred over SEC
The crypto industry generally prefers the CFTC as a regulator over the Securities and Exchange Commission (SEC), which retains control over cryptocurrencies that aren’t sufficiently decentralized. The passage of FIT21 is a significant move towards creating a regulated framework for digital assets in the US.
McHenry pointed out the Senate’s unexpected reaction to the bill’s strong support in the House. He said, “For us to pass the important FIT21 bill with a two-thirds vote of the House of Representatives in these divided times is a major statement.” However, the bill faces opposition from the SEC and President Joe Biden.
The Senate, led by Democrat Majority Leader Chuck Schumer, consists of 48 Democrats, three independents who caucus with them, and 49 Republicans. There are no time limits for discussing FIT21 in the Senate, and it needs a simple majority of 51 senators to pass.
Bipartisan Stablecoin Bill Efforts
McHenry has been working with Democrat Maxine Waters for nearly two years to advance a stablecoin bill. Still, he acknowledged it would be difficult to pass in the Senate without attaching it to a larger bill. He rejected the idea of linking it to the SAFER Banking Act, which supports cannabis companies’ access to financial services, stating:
“I’m not in favor of the cannabis banking legislation that’s been put forth. I voted against it in the last two Congresses.”
With the November 5 presidential election approaching, McHenry and his Republican colleagues plan to pressure Schumer and the Senate to prioritize the FIT21 bill. McHenry emphasized the need for serious policy to regulate cryptocurrency in the US.
The legislative push could significantly impact US crypto regulations, setting a precedent for future crypto regulations. The FIT21 bill aims to provide clearer guidelines for the crypto industry, promoting growth, innovation, investor protection, and market stability.
