Regulation
A US lawyer is pushing the Senate to pass a cryptocurrency regulation bill before the elections
Patrick McHenry, a retired Republican lawmaker, is urging the US Assembly to quickly pass the FIT21 cryptocurrency bill before the upcoming presidential election.
The Financial Innovation and Technology for the 21st Century Act (FIT21) was passed by the House of Representatives on May 22. The bill received yes votes from 71 Democrats and 208 Republicans.
The urgency of cryptocurrency regulation
McHenry, who chairs the House Financial Services Committee, stressed the importance of the bill during a recent interview in Bloomberg’s “Balance of Power” on May 30. He said the result of the House of Representatives votes should push the Senate to quickly pass the bill.
For context, the FIT21 bill aims to classify most virtual currencies as commodities. This would place them under the supervision of the Commodity Futures Trading Commission (CFTC).
Notably, most of the crypto community considers the CFTC to be a more favorable regulator than the CFTC SEC. This is mainly due to the SEC’s tough stance towards digital assets.
McHenry noted that the Senate was initially surprised by how quickly the FIT21 bill passed the House. Despite this, the bill faces opposition President Joe Biden and the SEC.
In particular, President Biden’s administration has always had reservations about the risks associated with insufficient regulation of digital assets. For the SEC, this opposition hinges on concerns about investor protection and market stability.
McHenry highlighted this divide in a different statement. She noted that the support of House Democrats and Republicans in these divisive times makes the bill crucial.
Meanwhile, the Senate, led by Democratic Majority Leader Chuck Schumer, is made up of 48 Democrats. It also includes three independents who side with Democrats and 49 Republicans. Therefore, a simple majority of 51 votes is required to pass the FIT21 bill.
Unlike the House, the Senate does not have a specific deadline to act on this bill, which adds to the complexity of the legislative process. If passed, the FIT21 Act would significantly change how digital assets are regulated in the United States.
McHenry’s collaboration with Maxine Waters and challenges with the Senate
Meanwhile, McHenry was collaborating with Democratic Rep. Maxine Waters for nearly two years to pass a stablecoin bill. Despite their efforts, McHenry acknowledges that the bill will likely have to be attached to larger legislation in order to pass the Senate.
McHenry strongly opposes linking the stablecoin law to the SAFER Banking Act, a regulation that allows cannabis companies greater access to financial services.
This position reflects his broader disapproval of using cannabis-related legislation as a vehicle to pass stablecoin legislation. Despite the challenges, McHenry is determined to push forward stablecoin legislation. He stressed that Republicans will pressure Senate Majority Leader Chuck Schumer and the Senate to prioritize passing a cryptocurrency bill.
The push for this legislation comes at a critical time, with the US presidential election due in November, just months away. McHenry’s efforts to pass the Stablecoin Act and other cryptocurrency-related legislation are part of a larger strategy to establish a clear regulatory framework for digital assets.
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