US Lawmaker Urges Senate Backing on FIT21 Crypto Legislation

Patrick McHenry, a departing Republican lawmaker in the United States, has urged the Senate to approve a critical crypto regulation bill. This bill is aimed at clarifying cryptocurrency regulations before the upcoming U.S. Presidential election in November.

On May 22, the U.S. House of Representatives gave the green light to the Financial Innovation and Technology for the 21st Century Act (FIT21) bill with a majority vote of 279 to 136, forwarding it to the Senate. According to McHenry, the strong approval of the FIT21 bill by the U.S. House should be a “wake-up call” to the Senate to swiftly pass it. 

Why FIT21 deserves swift approval 

In the crypto sector, the Commodity Futures Trading Commission (CFTC) is seen as a regulator more supportive of digital assets compared to the Securities and Exchange Commission (SEC). However, the SEC still oversees less decentralized cryptocurrencies.

The bill’s passing will set the stage for most cryptocurrencies to be classified as commodities and regulated by the CFTC, similar to how the agency classified stablecoins as commodities back in 2023.

Meanwhile, Mark Cuban, the billionaire investor, has once urged the CFTC to lead the regulation of the entire crypto sector. Like McHenry’s proposal, Mark has also emphasized the need for clear guidance from the U.S. Congress before the 2024 presidential election.

Biden and the SEC are opposed to the crypto regulation bill

McHenry pointed out that the bill passing with a two-thirds House vote is a big deal in these divided times, even with opposition from the SEC and President Biden.

Before the House voted on crypto regulation legislation, President Biden and Gary Gensler, the chairman of the SEC released statements opposing the FIT21 Act. They cited concerns that it lacks sufficient protections for consumers and investors who engage in certain digital asset transactions and could create new regulatory gaps and risk the stability of U.S. capital markets if passed.

However, with Biden administration’s newfound love in crypto, the crypto industry is hoping he might give a nudge toward the approval and even expedite the process with the Senate.

It was reported that the Senate doesn’t have a set timeframe to decide on FIT21. To pass, the Bill needs a majority vote of 51 senators. 

McHenry, a strong crypto advocate 

McHenry, working with Democrat Maxine Waters on crypto and stablecoin laws, mentioned that any new rules might have to be part of a bigger legislative bundle to move forward in the Senate.

McHenry clashed with Sherrie Brown, the Senate Banking Chairman over trying to link the stablecoin bill to the SAFER Banking Act, which expands financial service access for cannabis firms. McHenry, who is regarded as a friendly face in the crypto space, took a position at Andreessen Horowitz, a venture capital firm in 2022. 

He fortified his appointment as the top aide to House Financial Services to take nascent crypto assets lobbying to the next level.