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Several Democratic colleagues in the US House of Representatives ask their colleagues to join in yes on the crypto bill
The U.S. House of Representatives is set to vote Wednesday, largely expected to approve comprehensive cryptocurrency legislation with bipartisan support — a major step for the industry — and several Democrats are pushing their colleagues to vote Yes.
At least eight House Democrats openly supported the Financial Innovation and Technology for the 21st Century (FIT21) Act — and they could recruit more — according to a memo shared with CoinDesk by a congressional aide. At this point, the bill is expected to be discussed in the floor and voted on later on Wednesday.
“As Democrats, we believe this is a critical opportunity to regulate digital asset markets,” the eight lawmakers wrote in the internal memo Tuesday asking for support from their colleagues. “This should not be a partisan issue,” according to the lawmakers, who include Reps. Wiley Nickel (D-N.C.), Yadira Caraveo (D-Colo.), Jim Himes (D-Conn.), Jasmine Crockett (D -Colo.). Texas), Ritchie Torres (D-N.Y.), Darren Soto (D-Fla.), Josh Gottheimer (D-N.J.) and Don Davis (D-N.C.).
But despite supporters on both sides of the House, the effort still highlights the lack of similar progress in the Senate, where crypto market structure legislation could fail. To that end, senior officials on the House Financial Services and Agriculture committees working on the bill said Tuesday that they are having increasing discussions with their Senate counterparts, but are also open to legislative vehicles to which the bill could eventually be attached as this session of Congress heads toward it’s near.
“What we want is to have a substantial vote total this week in the House that will show momentum,” said Rep. Patrick McHenry (R-N.C.), chairman of the House Financial Services Committee who spearheaded the bill during the outgoing term. the lawmaker’s final months in Congress. He lamented to reporters Tuesday that efforts that were supposed to begin nearly a year ago had been delayed for so long. “We are now in May of an election year.”
Nonetheless, he said his fellow lawmakers are now also “aware” of the existence of crypto voters, and “that supports our efforts.”
FIT21 would establish a clear framework for digital assets in the United States, identifying where and how each token and exchange could be regulated. It establishes consumer protections, disclosures and addresses the use of cryptography in illicit finance. The vote on the bill represents the first time such a comprehensive piece of crypto legislation has reached a final decision in either chamber of Congress.
Democratic supporters have argued for intervention to control crypto markets, where major companies are waging a multi-pronged legal battle with the Securities and Exchange Commission (SEC) over how much that regulator has legitimate authority. Lawmakers also argued that the United States is lagging behind other countries that have already instituted rules for the industry.
“About 20% of Americans have invested in, traded or used cryptocurrencies, so this isn’t going anywhere,” according to the Democrats’ memo. “Meanwhile, Congress has failed to pass legislation to responsibly introduce this next generation of Internet technology.”
The House’s digital assets legislation does not yet face a promised veto from the White House, unlike the recent Senate vote that saw a large number of Democrats join all Republicans to approve a resolution to cancel an SEC crypto account policy – Staff Accounting Bulletin No. 121 (SAB 121).
Republican aides said they expected some of the 21 Democratic names who voted in the House to overturn SAB 121 might also support that bill.
FIT21 has already cleared its two relevant parliamentary committees with some Democratic support.
House Financial Services Committee Ranking Member Maxine Waters (D-Calif.) and House Agriculture Committee Ranking Member David Scott (D-G.G.) – the top Democrats on their respective panels – sent their own email to their Democratic colleagues telling them that they “strongly oppose” this effort, but they will not organize any vote against, Politico previously reported.
Consumer advocates, including Americans for Financial Reform, also opposed the bill, saying it did not sufficiently protect consumers and used a “easily manipulated definition” decentralization when it comes to deciding how things should be regulated.
Rep. Glenn “GT” Thompson (R-Pa.), chairman of the Agriculture Committee, told reporters that there is an urgent need for legislation because the current state of regulation has pushed the industry away from United States cryptography.
“Right now, most of them are parked somewhere offshore, because the only regulatory structure they see is regulation by enforcement,” he said.
In the Senate, a sweeping bill introduced by Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) is currently the closest equivalent to FIT21, and House aides said that discussions were underway on the topics discussed. which these bills find common ground.
Rashan Colbert, head of policy at dYdX Trading and former legislative aide to Sen. Cory Booker (D-N.J.), noted that the bill has been moving through the House for a year and a half.
“[For] the Senate to take it up, [starting] with the committee process to follow, that would be necessary to really examine this bill in its entirety,” he said. “So, unfortunately, I think there’s not much chance that the Senate is considering it this Congress.”
One of the key items to address would be funding for the Commodity Futures Trading Commission, which would have a much larger and defined role in overseeing crypto spot markets, but which currently only has a tiny fraction of the budget of its sister agency.
Nikhilesh De contributed reporting.
UPDATE (May 21, 2024, 7:48 p.m. UTC): Adds a comment from Americans for Financial Reform.