The House prepares for a historic crypto vote as the political tides shift

The vote is here.

When I first started covering this issue, Sam Bankman-Fried was wandering the halls of Congress, handing out donations to anyone in attendance in hopes of advancing crypto legislation. The strategy almost worked; The Senate Agriculture Committee came close to introducing a bill just before FTX’s collapse clouded its prospects. After a series of high-profile crashes and the cryptocurrency becoming a punching bag in congressional hearings, the industry’s political fortunes appeared to be in jeopardy.

More than a year later, the blockchain industry has witnessed a dramatic reversal of fortunes. Today, the House will vote on a comprehensive regulation that would create a supervisory framework around crypto’s “market structure,” meaning it would also define the separation of powers between the Securities and Exchange Commission and the Commodity Futures Trading Commission. like establishing the rules of the road for getting together and other important questions like custody. Although the bill’s future in the Senate is not bright, all signs point to a positive outcome.

Regardless of whether the bill, called the Financial Innovation and Technology Act for the 21st Century, or FIT21, becomes law this session (it probably won’t), it is a remarkable achievement for the industry. So what changed? Crypto maintained political allies in DC; Chief among them is Rep. Patrick McHenry (R.N.C.), chairman of the House Financial Services Committee, who will retire at the end of this term. Even though McHenry lost his partner across the aisle, ranking member Rep. Maxine Waters (D-Calif.), he was able to sway his party and a handful of Democrats to his side.

That political calculus got easier after last week’s vote in the Senate on more modest crypto legislation that would reverse a controversial SEC bulletin that would restrict banks’ ability to hold cryptocurrencies. The bill received surprising bipartisan support, including from Majority Leader Chuck Schumer (DY). In response, House Democrats decided not to whip or vote “no” against FIT21. Yesterday, American Prospect reported that even Rep. Nancy Pelosi (D-Calif.) might support the bill. At a briefing yesterday, senior committee staff involved in drafting the legislation said there had been a “consistent amount of engagement” since last summer, when FIT21 was voted on from both the House financial services and agriculture committees, but the waters had certainly become clearer. less wavy.

The bill still faces challenges. SEC Chairman Gary Gensler issued a lengthy statement this morning arguing that FIT 21 would erode nearly a century of investor protection laws, and prominent figures, including Waters, continue to strongly oppose the legislation. And despite former President Donald Trump’s attempt to turn crypto into a wedge issue, along with tens of millions of dollars in donations from the industry, it’s still unclear whether voters will be motivated by the prospect of financial regulation. While today’s vote marks a significant step forward for crypto, the industry will need to maintain this momentum after the election and into the next Congress if it has any hope of enacting legislation.

The story continues

McHenry was bullish at a press conference with reporters yesterday. “My time in Congress is coming to an end, but it is not the end of politics,” he said. “This set of policies is inevitable. It will happen, just like the crypto world is here to stay, even though it has been declared dead many times.”

Leo Schwartz
[email protected]
@leomschwartz

This story first appeared on Fortune.com