Patrick McHenry Calls for Senate Action on Crypto Bill FIT21 Pre-Election

Patrick McHenry, a Republican lawmaker, has urged the Senate to approve the Financial Innovation and Technology for the 21st Century Act (FIT21), which focuses on cryptocurrencies. The congressman expects the bill to be ratified before the November 5 elections.

Also Read: U.S. House Approves FIT21 Crypto Bill

Chairman of the House Financial Services Patrick McHenry has underlined that Senate Democrats have an obligation to move comprehensive crypto legislation before the November election. 

McHenry Pushes for Swift Passage of Crypto Regulation Bill

On May 22, the House of Representatives voted 71 Democrats and 208 Republicans in favor of the Financial Innovation and Technology Act of the 21st Century (FIT21). The House Financial Services Chairman, who will be retiring from Congress in January, during an interview with Bloomberg’s Balance of Power on May 30th, said:

This should be a wake-up call for the Senate that they need to get on with this […] They need to stay focused on getting policy here and get it done before the election.

Patrick McHenry 

Also Read: White House Will Not Veto FIT21 Cryptocurrency Bill

He underlined that the backing of Senate Majority Leader Chuck Schumer is essential, especially with stablecoin regulations. In caucus with all three independents in the chamber, Democrat Majority Leader Chuck Schumer leads the 48 Democrats in the Senate as opposed to the 49 Republicans. The Senate’s vote on FIT21 is not time-limited. However, for the bill to be approved, a majority of 51 senators must vote in favor.

The FIT21 Bill Is Important to the Crypto Community

The bill paves the way for classifying most cryptocurrencies as commodities and regulating them under the Commodity Futures Trading Commission. In addition, the crypto industry perceives the CFTC as a more favorable regulator towards crypto than the SEC. The bill notes that the SEC would still maintain jurisdiction over cryptocurrencies that lack sufficient decentralization. 

McHenry mentioned his partnership with Democratic Rep. Maxine Waters in an effort to pass a stablecoin bill for almost two years. He acknowledged that to secure its passage in the Senate. It would have to be included as part of a larger legislative package.

He strongly rejected the idea of linking the stablecoin bill to the SAFER Banking Act, which aims to improve cannabis companies’ access to financial services. He said,

“I’m not in favor of the cannabis banking legislation that’s been put forth. I voted against it in the last two Congresses.”

In addition, McHenry shared his plans to pass new data privacy legislation and a package to boost capital formation before leaving Congress in January. However, he recognized the difficulties of getting legislation approved in the months preceding the election.

FIT21 Crypto Bill Faces Resistance From the Senate

The bill faces opposition in the Senate, which could result in a FIT21 pass delay for the rest of the 118th Congress. Senate Banking Chairman Brown hasn’t shown any support for digital assets legislation.

Also Read: US House Approves Bill to Block Fed from Launching CBDC

In addition, Senator Warren has strongly voiced her opposition to regulatory reform measures for digital assets, with a particular emphasis on anti-money laundering (AML) requirements. However, the November elections are expected to impact the future crypto dynamics.

While FIT21 is unlikely to move in 2024, a stablecoin proposal could advance in the 118th Congress during the post-election lame-duck period. This could happen as part of a four-corner negotiation on a must-pass measure or a financial services package centered on stablecoin regulation, with the possibility of additional financial services legislation. 

Cryptopolitan Reporting by Florence Muchai