House Financial Services Committee Chair Patrick McHenry is urging the Senate to pass a crucial bill to clarify cryptocurrency regulations before the November presidential election in the U.S.
House Urges Senate Action on Cryptocurrency Regulation Before U.S. Election
On May 22, the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21) bill with a majority vote of 279 to 136, sending it to the Senate for further consideration.
The lower legislative body’s overwhelming support should serve as a “It’s a wake-up call for the Senate to take action,” McHenry stated on Bloomberg’s Balance of Power on May 30. “They need to remain focused on implementing policy and getting it done before the election,” he added.
The bill paves the way for most cryptocurrencies to be classified as commodities and regulated by the Commodity Futures Trading Commission (CFTC).
The cryptocurrency industry typically views the Commodity Futures Trading Commission (CFTC) as more supportive of cryptocurrencies than the Securities and Exchange Commission (SEC). However, the SEC would still have jurisdiction over cryptocurrencies that lack enough decentralization to meet certain criteria.
The House Financial Services chairman, retiring from Congress in January, said the Senate’s initial reaction was one of shock due to the wide margin by which the lower house had passed the bill.
“Passing the important bill FIT21 with a two-thirds vote of the House of Representatives in these divided times would be a significant statement,” McHenry stated.
The Senate has not set a specific deadline for taking action on FIT21. However, the bill requires a majority vote of at least 51 senators to pass. McHenry, who has been working with Democrat Maxine Waters on cryptocurrency and stablecoin legislation, suggested that any new regulation would probably have to be part of a broader legislative package to progress through the Senate.
Critics argue that the crypto bill is too industry-friendly, while the Biden administration stresses the need to balance consumer protections with opportunities for crypto innovation.
McHenry disagreed with Senate Banking Chairman Sherrod Brown’s proposal to connect a stablecoin package with a bipartisan marijuana banking bill, which is a priority for Schumer.
“I do not support the cannabis banking legislation,” stated McHenry, emphasizing his previous votes against it. He also mentioned that Republicans would do their best to exert pressure to encourage Schumer and the Senate to prioritize passing a crypto bill.
FAQs: Cryptocurrency Regulation and the FIT21 Bill
1. What is the Financial Innovation and Technology for the 21st Century Act (FIT21) bill?
FIT21 is a bill passed by the U.S. House of Representatives aimed at clarifying cryptocurrency regulations and paving the way for most cryptocurrencies to be classified as commodities regulated by the Commodity Futures Trading Commission (CFTC).
2. What was the outcome of the FIT21 bill in the House of Representatives?
The FIT21 bill was passed by a majority vote of 279 to 136 in the House of Representatives on May 22, 2024, and has been sent to the Senate for further consideration.
3. Why is House Financial Services Committee Chair Patrick McHenry urging the Senate to pass the FIT21 bill before the November presidential election?
McHenry believes that the overwhelming support for the FIT21 bill in the House serves as a wake-up call for the Senate to take action and implement policy before the election.
4. How does the FIT21 bill propose to regulate cryptocurrencies?
The FIT21 bill proposes to classify most cryptocurrencies as commodities and regulate them under the jurisdiction of the Commodity Futures Trading Commission (CFTC). However, the Securities and Exchange Commission (SEC) would still have jurisdiction over cryptocurrencies that do not meet certain decentralization criteria.
5. According to Patrick McHenry, What is the Senate’s reaction to the FIT21 bill?
McHenry stated that the Senate initially reacted with shock to the wide margin by which the FIT21 bill passed in the House of Representatives.
6. Is there a specific deadline for the Senate to take action on the FIT21 bill?
The Senate has not set a specific deadline for taking action on the FIT21 bill. However, the bill requires a majority vote of at least 51 senators to pass.
7. How does McHenry suggest new cryptocurrency regulation might progress through the Senate?
McHenry suggests that any new regulation, including the FIT21 bill, would likely need to be part of a broader legislative package to progress through the Senate.
8. What are the criticisms of the FIT21 bill?
Critics argue that the FIT21 bill is too industry-friendly, while the Biden administration emphasizes the need to balance consumer protections with opportunities for crypto innovation.
9. What is McHenry’s stance on connecting a stablecoin package with a bipartisan marijuana banking bill?
McHenry does not support connecting a stablecoin package with a bipartisan marijuana banking bill, emphasizing his previous votes against it.
10. What efforts does McHenry mention regarding pressuring Schumer and the Senate to prioritize passing a crypto bill?
McHenry mentions that Republicans would do their best to exert pressure to encourage Schumer and the Senate to prioritize passing a crypto bill, emphasizing the importance of cryptocurrency regulation.