US Lawyer Nudges Senate to Pass Crypto-Regulating Bill Before Election

Patrick McHenry, a soon-to-retire Republican lawmaker, urges the US assembly to quickly pass the FIT21 crypto bill before the upcoming presidential election.

The Financial Innovation and Technology for the 21st Century Act (FIT21) was approved by the House of Representatives on May 22. The bill received a yes from 71 Democrats and 208 Republicans.

The Urgency of Crypto Regulation

McHenry, who chairs the House Financial Services Committee, stressed the bill’s importance during a recent interview on Bloomberg’s “Balance of Power” on May 30. He stated that the result of the House of Reps votes should prompt the Senate to pass the bill quickly.

For context, the FIT21 bill aims to classify most virtual currencies as commodities. This would place them under the oversight of the Commodity Futures Trading Commission (CFTC).

Notably, most of the crypto community considers the CFTC a more favorable regulator than the SEC. This is primarily due to the SEC’s tough stance on digital assets.

McHenry noted that the Senate was initially surprised by how decisively the FIT21 bill passed in the House. Despite this, the bill faces opposition from President Joe Biden and the SEC.

Notably, 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 pointed to this division in a different statement. He noted that the support from Democrats and Republicans in the House in these divided times makes the bill crucial.

Meanwhile, the Senate, led by Democratic Majority Leader Chuck Schumer, consists of 48 Democrats. It also includes three independents who side with the Democrats and 49 Republicans. As such, a simple majority of 51 votes is needed to pass the FIT21 bill.

Unlike the House, the Senate does not have a specific deadline to act on this bill, adding to the complexity of the legislative process. If passed, the FIT21 bill would significantly change how digital assets are regulated in the United States.

McHenry’s Collaboration with Maxine Waters and Challenges with Senate

Meanwhile, McHenry has been collaborating with Democratic Representative Maxine Waters for nearly two years to pass a stablecoin bill. Despite their efforts, McHenry acknowledges that the bill will likely need to be attached to a larger legislation to make it through the Senate.

McHenry firmly opposes linking the stablecoin bill to the SAFER Banking Act, a regulation that allows cannabis firms greater access to financial services.

This stance reflects his broader disapproval of using cannabis-related legislation as a vehicle for passing the stablecoin bill. Despite the challenges, McHenry is determined to push the stablecoin bill forward. He emphasized that Republicans will pressure Senate Majority Leader Chuck Schumer and the Senate to prioritize passing a crypto bill.

The push for this legislation comes at a critical time, with the US presidential elections slated to be held in November, just a few months from now. McHenry’s efforts to pass the stablecoin bill and other crypto-related legislation are part of a broader strategy to establish a clear regulatory structure for digital assets.