Regulation
McHenry Pushes for Senate to Approve FIT21 Crypto Bill
House Financial Services Committee Chairman Patrick McHenry is urging the Senate to pass a crucial bill aimed at clarifying cryptocurrency regulations ahead of November’s U.S. presidential election.
On May 22, the US House of Representatives approved the Financial Innovation and Technology for the 21st Century (FIT21) bill by a majority of 279-136, pushing it to the Senate.
The overwhelming support from the lower legislature should be a “wake-up call to the Senate that they need to get on with this,” McHenry said in Bloomberg’s Balance of Power on May 30.
“They need to stay focused on developing policies here and implementing them before the election,” he added.
The bill paves the way for most cryptocurrencies to be classified as basic products and fall under the regulation of the Commodity Futures Trading Commission (CFTC).
The crypto industry generally perceives the CFTC as more favorable to cryptocurrencies in relation to the Securities and Exchange Commission (SEC). However, the SEC would still retain authority over cryptocurrencies that do not meet the criteria for sufficient decentralization.
The House Financial Services chairman, who is retiring from Congress in January, said the initial reaction he felt from the Senate was shock at the lower chamber’s wide margin .
“For us to pass this important FIT21 bill with a two-thirds vote of the House of Representatives in these divided times is a major statement,” McHenry said.
The Senate does not have a specific deadline for taking action on FIT21. For the bill to pass, it requires a majority vote of at least 51 senators.
McHenry, who worked with Democrat Maxine Waters on cryptocurrency and stablecoin legislation, indicated that any new regulations would likely have to be integrated into a larger legislative package to advance in the Senate.
Criticisms of the crypto bill argue he is too accommodating towards the industry, while the Biden administration stressed that any digital asset legislation must balance consumer protection with opportunities for crypto innovation.
McHenry also opposed Senate Banking Chairman Sherrod Brown’s suggestion to tie a stablecoin package to a bipartisan marijuana banking bill, which is a priority for Schumer.
“I’m not in favor of cannabis banking legislation,” McHenry said, noting his previous votes against it.
He added that Republicans would “press in the best way possible” to urge Schumer and the Senate to prioritize passing a crypto bill.