Crypto Industry Rallies Behind House Bill as It Heads Toward Final Vote

A significant portion of the crypto industry has sent a letter to the leading lawmakers of the US House of Representatives, explaining why they should support the "Financial Innovation and Technology 21st Century Act" and how its adoption will help the US keep up with global competitors.

The US House of Representatives is on the eve of a vote that will demonstrate how close the cryptocurrency industry has ever been to final regulation in the US. Industry associations and leading companies are urging House leaders to support these efforts.

Through the Crypto Council for Innovation, a coalition of organizations and companies involved in digital assets, including Coinbase, Kraken, Andreessen Horowitz, Digital Currency Group, and about 50 others, have written a letter to House Speaker Mike Johnson (Los Angeles) and Minority Leader Hakim Jeffries (New York) urging them to support the passage of this bill.

The Financial Innovation and Technology for the 21st Century Act (FIT21) has been scheduled for discussion next week, and experts are hopeful that the vote will take place mid-week.

The bill designates the Commodity Futures Trading Commission (CFTC) as the primary regulator of digital assets and clearly defines the issues that the CFTC will handle, as well as those to be handled by the Securities and Exchange Commission (SEC). It also provides consumer protection measures, including rules for the custody of client assets and procedures in cases of bankruptcy, and establishes additional safeguards against risky behavior.

"The passing of this bill can accelerate the development of blockchain technology and digital assets, promote financial transparency, and safeguard national security," the letter stated. "It is extremely important for the US to maintain its leadership in financial innovation."

Currently, the crypto industry in Washington is gaining momentum after the House of Representatives and Senate easily passed a resolution overturning the cryptocurrency accounting policy from the Securities and Exchange Commission, although President Joe Biden promised to veto this change. This move, aimed at repealing Staff Accounting Bulletin 121 (SAB 121), demonstrated that the industry's fight had ended in its favor, gaining many supporters from the Democratic Party, which was more cautious than the Republicans in supporting cryptocurrencies.

During the accounting debate, one-fifth of Senate Democrats, including Senate Majority Leader Chuck Schumer (D-N.Y.), voted in favor of the industry, as did one-tenth of House Democrats.

However, the comprehensive bill, now approaching a vote in the House of Representatives, is much more extensive, and key Senate Democrats are not yet ready to support the House's initiative. As of today, the Senate has only shown potential willingness to consider another crypto bill regulating the activities of stablecoin issuers alongside other financial legislation.

Representative Patrick McHenry (Republican Party of North Carolina), chair of the House Financial Services Committee where the bill was initiated, noted that the level of Democratic support for FIT21 in the House of Representatives may be the key factor in determining whether the Senate will act. After passing through his committee, the bill gained the support of several Democrats, despite opposition from their leader, Representative Maxine Waters (California, USA).

On its way to the session hall, the FIT21 bill ran into a series of amendments recommended by the House Rules Committee to be made by May 16, the set deadline.