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Several US House Democrats Call on Colleagues to Join Yes Side on Cryptocurrency Bill
The U.S. House of Representatives is on the verge of a vote on Wednesday that would pass comprehensive cryptocurrency legislation with bipartisan support — a major milestone for the industry — and several Democrats are urging their colleagues to vote yes.
At least eight House Democrats have openly supported the Financial Innovation and Technology for the 21st Century Act (FIT21) – and may recruit more – according to a note shared with CoinDesk by a congressional aide. At this point, the bill should be discussed in the chamber and voted on on Wednesday.
“As Democrats, we believe this is a crucial 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 lawmakers, including Reps. Wiley Nickel (D-N.C.), Yadira Caraveo (D-Colo.), Jim Himes (D-Conn.), Jasmine Crockett (D – Tex.), Ritchie Torres (DN.Y.), Darren Soto (D-Fla.), Josh Gottheimer (DN.J.) and Don Davis (DN.C.).
But despite supporters on both sides of the House aisle, the effort further highlights the lack of similar progress in the Senate, where cryptocurrency 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 bill could possibly be attached as this session of Congress winds to a close.
“What we want is to have a substantive vote this week in the House that shows momentum,” said Rep. Patrick McHenry (R-N.C.), chairman of the House Financial Services Committee who shepherded the bill into Council in last months pension of the member of Congress. He complained to reporters Tuesday that the effort planned nearly a year ago has been delayed so long. “We are now in May of an election year.”
However, he said his fellow lawmakers also now have an “awareness” of the existence of crypto voters, and “this 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 protection, disclosure and addresses the use of cryptocurrencies in illicit finance. The vote on the bill represents the first time such a comprehensive piece of cryptocurrency legislation has reached a final decision in both houses of Congress.
Democratic advocates have argued for action to police cryptocurrency markets, where major companies are waging a multi-pronged legal battle with the Securities and Exchange Commission (SEC) over how much authority that regulator legitimately has. Lawmakers also argued that the United States has lagged behind other jurisdictions that have already established regulations for the industry.
“About 20% of Americans have invested in, traded in, or used cryptocurrencies, so they’re not going anywhere,” according to the Democrats’ memo. “Meanwhile, Congress has failed to pass legislation to usher in this new generation of Internet technology in a responsible manner.”
The House digital assets legislation is not yet facing any veto promises from the White House, unlike the recent vote in the Senate which saw large numbers of Democrats join all Republicans in approve a resolution to Reverse an SEC Crypto Account Policy – Accounting Staff Bulletin No. 121 (SAB 121).
Republican aides said they expect some of the same 21 named Democrats who voted in the House to overturn SAB 121 might support this bill.
FIT21 previously cleared its two relevant House committees with some Democratic support.
House Financial Services Committee Ranking Member Maxine Waters (D-Calif.) and House Agriculture Committee Ranking Member David Scott (D-Ga.) — the top Democrats in their respective groups — have sent his own email to fellow Democrats saying he still “strongly oppose” the initiative, but they will not organize any dissenting votes, Politico previously reported.
Consumer advocates, including Americans for Financial Reform, also opposed the bill, saying it does not sufficiently protect consumers and uses a “easily manipulated definition” of decentralization when deciding how to regulate things.
Rep. Glenn “GT” Thompson (R-Pa.), chairman of the Agriculture Committee, told reporters that passing the legislation is urgent because the current state of regulation has driven the cryptocurrency business away from the states United
“Right now, most of them are parked somewhere offshore, because the only regulatory structure they see is regulation through enforcement,” he said.
In the Senate, a far-reaching bill presented by the Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (DN.Y.) is currently the closest equivalent to FIT21, and House aides said talks are underway on where such bills find a 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 making its way through the House for a year and a half.
“[For] the Senate to deal with the matter, [starting] with the committee process to go through, it would be necessary to really consider this bill in its entirety,” he said. “So, unfortunately, I think there’s not a great chance that the Senate will consider it in this Congress.”
One of the key components to resolve would be the funding of the Commodity Futures Trading Commission, which would have a much more significant and defined role in policing the cryptocurrency spot markets, but currently has a small portion of its sister agency’s budget.
Nikhilesh De contributed reporting.
UPDATE (May 21, 2024, 7:48 PM UTC): Adds comment from Americans for Financial Reform.