McHenry pushes for Senate approval of FIT21 crypto bill

Patrick McHenry, chairman of the House Financial Services Committee, is urging the Senate to pass a landmark bill aimed at clarifying cryptocurrency regulations ahead of the November presidential election in the United States

On May 22, the US House of Representatives approved the Financial Innovation and Technology Act for the 21st Century (FIT21) bill by a majority of 279-136 and sent it to the Senate.

The overwhelming support from the lower legislature should be “a wake-up call for the Senate that they need to get this done,” McHenry told Bloomberg’s Balance of Power on May 30.

“They need to focus on making policy here and getting this done before the election,” he added.

The bill paves the way for most cryptocurrencies to be classified as commodities and come under regulation by the Commodity Futures Trading Commission (CFTC).

The crypto industry generally perceives the CFTC more favorably towards cryptocurrencies than the Securities and Exchange Commission (SEC). However, the SEC will continue to retain jurisdiction over cryptocurrencies that do not meet sufficient decentralization criteria.

The House Financial Services chairman, who will retire from Congress in January, said the initial reaction he felt from the Senate was shock at the wide margin that passed the lower chamber.

“In these divided times, passing this important FIT21 bill with a two-thirds vote of the House of Representatives is an important statement for us,” McHenry said.

The Senate does not have a specific deadline to act on FIT21. The bill requires a majority vote of at least 51 senators to pass.

McHenry, who has collaborated with Democrat Maxine Waters on both cryptocurrency and stablecoin legislation, noted that any new regulations would likely need to be included in a larger legislative package to advance in the Senate.

While critics of the crypto bill argue that it is too lenient on the industry, the Biden administration has emphasized that any digital asset legislation must balance consumer protection with opportunities for crypto innovation.

McHenry also opposed Senate Banking Chairman Sherrod Brown’s proposal to tie the stablecoin package to the bipartisan marijuana banking bill, a priority for Schumer.

“I do not support marijuana banking legislation,” McHenry said, noting his previous negative votes.

He added that Republicans “will apply pressure to the best of our ability” to encourage Schumer and the Senate to prioritize passing a crypto bill.