Kelvin Daminabo
Patrick McHenry, the Chair of the House Financial Services Committee, is calling on the Senate to approve the Financial Innovation and Technology for the 21st Century Act (FIT21) bill, which aims to clarify cryptocurrency regulations. The bill garnered significant support in the House of Representatives and McHenry sees this as a prompt for the Senate to take action.
McHenry stresses the urgency of passing the bill before the upcoming presidential election, urging the Senate to prioritize policy agendas. The bill proposes categorizing most cryptocurrencies as commodities under the Commodity Futures Trading Commission (CFTC) regulation, which is viewed as more favorable for the crypto industry compared to the Securities and Exchange Commission (SEC).
Despite this classification, the SEC would still maintain jurisdiction over cryptocurrencies that do not meet decentralized criteria. Collaboration between McHenry and Democrat Maxine Waters on cryptocurrency and stablecoin legislation is ongoing, with the understanding that any new regulations would need to be integrated into a broader legislative framework for Senate advancement.
There are concerns from critics that the bill is overly favorable to the industry, while the Biden administration stresses the importance of digital asset legislation to balance consumer protections and foster crypto innovation opportunities. McHenry opposes the inclusion of a stablecoin package with a bipartisan marijuana banking bill, a priority for Senate Majority Leader Chuck Schumer.
The Senate does not have a set deadline for acting on FIT21, with the bill necessitating a majority vote of at least 51 senators for approval. McHenry’s push for Senate endorsement aligns with his imminent retirement from Congress in January, underscoring the significance of this bill as part of his legacy. The crypto sector is monitoring developments closely, as the bill’s approval would offer much-needed clarity and regulatory stability.