The cryptocurrency industry’s groups and leading companies are pushing House leaders to back the initiative as the U.S. House of Representatives prepares to hold a vote that may bring the industry the closest to ever gaining regulation in the country.
A coalition of companies and organizations focused on digital assets, including Coinbase, Kraken, Andreessen Horowitz, the Digital Currency Group, and roughly fifty more, wrote a letter to Speaker of the House Mike Johnson (R-La.) and Minority Leader Hakeem Jeffries (D-N.Y.) through the Crypto Council for Innovation, urging them to pass the bill. It is anticipated that there will be a midweek vote on the Financial Innovation and Technology for the 21st Century Act (FIT21) during floor time next week.
The measure clearly defines the responsibilities of the Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), establishing the CFTC as a premier regulator of digital assets. after addition to establishing further barriers against risky behavior, it would create consumer protections, such as guidelines for the custody of customers’ assets and how they are treated after bankruptcy.
“By passing this legislation, we can accelerate the growth of blockchain technology and digital assets, fostering financial inclusion and protecting national security,” according to the letter. “It is crucial for the U.S. to maintain its leadership in financial innovation.”
The resolution to reverse the SEC’s crypto accounting regulation was easily passed by the House and Senate, and the crypto sector in Washington is celebrating this victory, even though President Joe Biden has threatened to veto the attempt. The decision to remove the SEC’s Staff Accounting Bulletin 121 (SAB 121) was a victory for the industry, garnering support from the Democratic Party, which has been less forthcoming than the Republican Party in endorsing cryptocurrencies.
Majority Leader Chuck Schumer (D-N.Y.) and over one in five Senate Democrats sided with the industry during that accounting battle, while over one in ten House Democrats did the same. However, the comprehensive measure that is being considered for a House vote is substantially larger in scope, and prominent Senate Democrats have not yet shown ready to match the House’s effort. The Senate’s current stance on cryptocurrencies is limited to suggesting that it would be open to bundling a bill governing stablecoin issuers with other financial legislation.
The Democratic support for FIT21 in the House might play a significant role in determining whether the Senate takes action on the bill, according to Rep. Patrick McHenry (R-N.C.), the chairman of the House Financial Services Committee where it was introduced. Rep. Maxine Waters (D-Calif.), their senior member, opposed the legislation, but it passed his committee with the support of a few Democrats.