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Crypto Industry Rally Behind US House Bill as It Heads for Final Vote
The US House of Representatives is on the verge of a vote that will represent the closest the cryptocurrency industry has ever come to finally getting regulation in the US, 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, the Digital Currency Group and about 50 others, wrote a letter to House Speaker Mike Johnson (R-La. ) and Minority Leader Hakeem Jeffries (DN.Y.), arguing for passage of the bill. The Financial Innovation and Technology for the 21st Century (FIT21) Act has been cleared for session next week, where observers expect to see a mid-week vote.
The bill would define the Commodity Futures Trading Commission (CFTC) as a lead regulator of digital assets and establish clear divisions on what the CFTC will handle and what would fall under the purview of the Securities and Exchange Commission (SEC). It would establish consumer protections – including rules around the custody of customers’ assets and their treatment in the event of bankruptcy – and establish additional barriers against risky behavior.
“By passing this legislation, we can accelerate the growth of blockchain technology and digital assets, promoting financial inclusion and protecting national security,” according to the letter. “It is crucial that the US maintains its leadership in financial innovation.”
The crypto industry is hot in Washington right now, having watched both the House and Senate Easily approve a resolution overturn an SEC crypto accounting policy, although President Joe Biden has promised to veto the initiative. This move to delete the SEC’s Personnel Accounting Bulletin 121 (SAB 121) represented a fight that was decidedly pro-industry, attracting many supporters from the Democratic Party, which has been more reticent than Republicans in supporting crypto.
In that accounting fight, more than one in five Senate Democrats voted in favor of the industry, including Majority Leader Chuck Schumer (DN.Y.), and about one in 10 House Democrats.
But the sweeping legislation now approaching a vote in the House is of a much greater magnitude, and top Senate Democrats have so far appeared unprepared to match the House’s effort. To date, the Senate has only shown a potential willingness to fit a different crypto bill – one that regulates stablecoin issuers – into a package with other financial legislation.
Rep. Patrick McHenry (RN.C.), chairman of the House Financial Services Committee where the bill was launched, said the level of democratic support for FIT21 in the Chamber could be an important factor for the Senate to take action. When the measure passed its committee, it did so with a handful of Democrats on board, despite opposition from its senior member, Rep. Maxine Waters (D-Calif.).
On its way to the ground, the FIT21 effort drew a range of changes requested by the House Rules Committee to meet the May 16 deadline.