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Several fellow US House Democrats petition to join yes side on crypto bill
The US House of Representatives is on the verge of a vote on Wednesday that is expected to pass sweeping cryptocurrency legislation with bipartisan support – a major milestone for the industry – and several Democrats are pushing their colleagues to vote yes.
At least eight House Democrats have openly supported the Financial Innovation and Technology for the 21st Century (FIT21) Act — and may recruit more — according to a memo shared with CoinDesk by a congressional aide. At this point, the project is scheduled for plenary discussion and voting at the end of the day on Wednesday.
“As Democrats, we feel this is a crucial opportunity to regulate digital asset markets,” the eight lawmakers wrote in Tuesday’s internal memo, asking for their colleagues’ support. “This should not be a partisan issue,” according to lawmakers including Reps. Wiley Nickel (D-N.C.), Yadira Caraveo (D-Colo.), Jim Himes (D-Conn.), Jasmine Crockett (D. -Conn.), Jasmine Crockett (D-Conn.) Texas), Ritchie Torres (DN.Y.), Darren Soto (D-Florida), Josh Gottheimer (DN.J.) and Don Davis (DN.C.) .
But despite fans on both sides of the House, the effort further highlights the lack of similar progress in the Senate, where legislation on crypto market structure could fail. To that end, senior officials on the House Financial Services and Agriculture committees working on the bill said Tuesday that they are having increasing discussions with their Senate counterparts, but are also open to legislative vehicles through which the bill could eventually be attached as this session of Congress moves toward is close.
“What we want is to have a substantial vote total this week in the House that shows momentum,” said Rep. Patrick McHenry (RN.C.), chairman of the House Financial Services Committee who shepherded the bill into retirement. last months of the legislator in Congress. He lamented to reporters Tuesday that the effort that was supposed to happen nearly a year ago had been delayed so long. “We are now in May of an election year.”
Still, he said his fellow lawmakers are now also “aware” of the existence of encrypted voters and “this supports our efforts.”
FIT21 would establish a clear framework for digital assets in the US, identifying where and how each token and exchange could be regulated. Establishes consumer protections, disclosures, and addresses the use of cryptography in illicit finance. The vote on the bill represents the first time such sweeping crypto legislation has reached a final decision in either chamber of Congress.
Democratic advocates have argued for the need to intervene to police the crypto markets, where major companies are locked in a multi-front legal battle with the Securities and Exchange Commission (SEC) over how much authority that regulator rightfully has. Lawmakers also argued that the US is falling behind other jurisdictions that have already instituted rules for the industry.
“Approximately 20% of Americans have invested, traded, or used crypto, so this isn’t going anywhere,” according to the Democrats’ memo. “Meanwhile, Congress has failed to pass legislation to responsibly usher in this new generation of Internet technology.”
The House’s digital asset legislation does not yet face any promised veto from the White House, unlike the recent vote in the Senate, which saw a large number of Democrats join all Republicans to approve a resolution to reverse an SEC crypto account policy – Staff Accounting Bulletin No. 121 (SAB 121).
Republican aides said they hope that some of the same 21 Democratic names who voted in the House to overturn SAB 121 may also support this bill.
FIT21 has already approved its two relevant House committees with some Democratic support.
House Financial Services Committee Ranking Member Maxine Waters (D-Calif.) and House Agriculture Committee Ranking Member David Scott (D-Ga.) – the top Democrats on their respective panels – sent their own email to fellow Democrats saying they still “strongly oppose” the effort, but they will not organize any votes against it, Politico previously reported.
Consumer advocates, including Americans for Financial Reform, also argued against the bill, saying it did not sufficiently protect consumers and used a “Easily manipulated definition“of decentralization when deciding how things should be regulated.
Rep. Glenn “GT” Thompson (R-Pa.), chairman of the Agriculture Committee, told reporters that passing legislation is urgent because the current state of regulation has driven crypto businesses away from the U.S.
“Right now, most of them are stationed somewhere offshore because the only regulatory structure they see is regulation by enforcement,” he said.
In the Senate, a comprehensive bill from Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (DN.Y.) is currently the closest equivalent to FIT21, and House aides said negotiations are underway on the topics in which these bills find common ground.
Rashan Colbert, head of policy at dYdX Trading and former legislative assistant to Senator Cory Booker (DN.J.), noted that the bill has been working its way through the House for a year and a half.
“[For] the Senate to take this on, [starting] with the committee process to be approved, this would be necessary to actually consider this bill in full,” he said. “So, unfortunately, I don’t think there’s a great chance the Senate will consider it this Congress.”
One of the key components to resolve would be funding for the Commodity Futures Trading Commission, which would have a much more significant and defined role in policing cryptocurrency spot markets, but currently has a small fraction of its sister agency’s budget.
Nikhilesh De contributed reporting.
UPDATE (May 21, 2024, 7:48 pm UTC): Adds comments from Americans for Financial Reform.