Republican lawmaker Patrick McHenry has called on the Senate to approve the Financial Innovation and Technology for the 21st Century Act (FIT21), a bill that focuses on cryptocurrencies. McHenry is optimistic that the bill will be ratified before the November 5 elections.
Chairman of the House Financial Services, Patrick McHenry, has emphasized the need for Senate Democrats to pass comprehensive crypto legislation before the November election.
On May 22, the House of Representatives voted in favor of the FIT21 bill, with 71 Democrats and 208 Republicans supporting it. McHenry, who will be retiring from Congress in January, stated during an interview with Bloomberg’s Balance of Power on May 30th:
“It is crucial to have the support of Senate Majority Leader Chuck Schumer, especially when it comes to stablecoin regulations. Schumer leads the 48 Democrats in the Senate, while there are 49 Republicans. A majority of 51 senators must vote in favor of FIT21 for it to be approved.”
The FIT21 bill is of great importance to the crypto community as it classifies most cryptocurrencies as commodities and subjects them to regulation by the Commodity Futures Trading Commission (CFTC). The crypto industry sees the CFTC as a more favorable regulator compared to the Securities and Exchange Commission (SEC). However, the SEC would still have jurisdiction over cryptocurrencies that lack sufficient decentralization.
McHenry mentioned his collaboration with Democratic Rep. Maxine Waters in the effort to pass a stablecoin bill for nearly two years. He acknowledged that in order to secure its passage in the Senate, it would need to be included as part of a larger legislative package.
McHenry strongly opposed the idea of linking the stablecoin bill to the SAFER Banking Act, which aims to improve access to financial services for cannabis companies. He stated:
“I have plans to pass new data privacy legislation and a package to boost capital formation before leaving Congress in January. However, I am aware of the challenges of getting legislation approved in the months leading up to the election.”
The FIT21 bill is facing opposition in the Senate, which could result in a delay in its passage for the rest of the 118th Congress. Senate Banking Chairman Brown has not shown any support for digital assets legislation. Senator Warren has also expressed strong opposition to regulatory reform measures for digital assets, particularly regarding anti-money laundering (AML) requirements. However, the outcome of the November elections is expected to influence the future of crypto regulations.
While it is unlikely that FIT21 will progress in 2024, a stablecoin proposal could advance in the 118th Congress during the post-election lame-duck period. This could occur as part of negotiations on a must-pass measure or a financial services package focused on stablecoin regulation, with the potential for additional financial services legislation.