McHenry pushes for Senate approval of FIT21 crypto bill

House Financial Services Committee chair Patrick McHenry is urging the Senate to pass a crucial bill that seeks to clarify cryptocurrency regulations prior to the November presidential election in the U.S.

On May 22, the U.S. House of Representatives approved the Financial Innovation and Technology for the 21st Century Act (FIT21) bill by a majority of 279 to 136, pushing it to the Senate.

The massive support from the lower legislative body should be a “wake-up call for the Senate that they need to get on with this,” McHenry told Bloomberg’s Balance of Power on May 30.

“They need to stay focused on getting policy here and get it done before the election,” he added.

The bill paves the way for most cryptocurrencies to be classified as commodities and fall under the regulation of the Commodity Futures Trading Commission (CFTC).

The crypto industry generally perceives the CFTC as more favorable towards cryptocurrencies compared to the Securities and Exchange Commission (SEC). However, the SEC would still retain authority over cryptocurrencies that do not meet the criteria for sufficient decentralization.

The House Financial Services chairman, who is retiring from Congress in January, said the initial reaction he felt from the Senate was shock over the wide margin it had passed the lower house.

“For us to pass that important bill FIT21 with a two-thirds vote of the House of Representatives in these divided times, it is a major statement,” said McHenry.

The Senate has no specific deadline for taking action on FIT21. For the bill to pass, it requires a majority vote of at least 51 senators.

McHenry, who has been collaborating with Democrat Maxine Waters on both cryptocurrency and stablecoin legislation, indicated that any new regulation would likely need to be incorporated into a larger legislative package to advance through the Senate.

Critics of the crypto bill argue it is overly accommodating to the industry, while the Biden administration has emphasized that any digital asset legislation must balance consumer protections with opportunities for crypto innovation.

McHenry also opposed Senate Banking Chairman Sherrod Brown’s suggestion to link a stablecoin package to a bipartisan marijuana banking bill, which is a priority for Schumer.

“I’m not in favor of the cannabis banking legislation,” McHenry said, noting his previous votes against it.

He added that Republicans would “apply pressure in the best way we can” to urge Schumer and the Senate to prioritize passing a crypto bill.