Regulation
Crypto industry rallies in support of US House bill as it heads towards final vote
The U.S. House of Representatives is on the brink of a vote that will be the closest the cryptocurrency industry has ever come to definitive regulation in the United States, and industry associations and major companies are encouraging House leaders to support the effort.
Through the Crypto Council for Innovation, a coalition of digital asset organizations and companies, including Coinbase, Kraken, Andreessen Horowitz, Digital Currency Group and about 50 others, wrote a letter to House Speaker Mike Johnson (R-La.) and Minority Leader Hakeem Jeffries (D-N.Y.), supporting passage of the bill. The Financial Innovation and Technology for the 21st Century Act (FIT21) has been cleared to take the stage next week, where observers hope to see a vote mid-week.
The bill would establish the Commodity Futures Trading Commission (CFTC) as the primary regulator of digital assets and establish clear divisions for what the CFTC would manage and what would fall under the purview of the Securities and Exchange Commission (SEC). It would establish consumer protections – including rules on the custody of customers’ assets and their treatment in bankruptcy – and establish further protections against risky behavior.
“By passing this legislation, we can accelerate the growth of blockchain technology and digital assets, fostering financial inclusion and protecting national security,” the letter reads. “It is critical that the United States maintain its leadership in financial innovation.”
The cryptocurrency industry is at a high in Washington right now, having observed both the House and Senate Easily pass a resolution overturning an SEC crypto accounting policy, even as President Joe Biden has vowed to veto the effort. The move to cancel the SEC’s Staff Accounting Bulletin 121 (SAB 121) represented a battle that went decidedly in the industry’s favor, attracting many supporters of the Democratic Party who have been more reticent than Republicans to support cryptocurrencies.
For that accounting dispute, more than one in five Senate Democrats voted for the industry, including Majority Leader Chuck Schumer (D-N.Y.), and that was about one in 10 House Democrats.
But the overall legislation now approaching a House vote is much more far-reaching, and top Senate Democrats have so far appeared unprepared to match the House’s efforts. To date, the Senate has shown only a potential willingness to insert a different cryptocurrency law – one that regulates stablecoin issuers – into a package with other financial laws.
Rep. Patrick McHenry (R-N.C.), chairman of the House Financial Services Committee where the bill was launched, said that level of democratic support for FIT21 in the House could be an important factor in getting the Senate to take action. When the measure cleared its committee, it did so with a handful of Democrats on board, despite opposition from their senior member, Rep. Maxine Waters (D-California).
On its way to the floor, the FIT21 effort scored a series of amendments asked by the House Rules Committee to meet the May 16 deadline.