Momentum Builds for McHenry’s FIT 21 Crypto Bill Post-Election

• U.S. lawmakers identify potential for advancing crypto-related legislation post-election with bipartisan support being crucial for passage.
• Patrick McHenry, Chair of the House Financial Services Committee, describes the prospects of his crypto market structure bill gaining traction at year’s end.
• McHenry’s remarks highlight bipartisan momentum, reflecting extensive support from both major parties for clearer regulatory guidelines in the crypto industry.

Insights on potential crypto regulation advancements in the U.S., with key legislators signaling the likelihood of significant legislative movements post-election.

Patrick McHenry’s Optimism for Crypto Regulation

In an insightful panel discussion at Georgetown University’s Financial Markets Quality Conference, Patrick McHenry, Chair of the House Financial Services Committee, expressed optimism about the future of his crypto market structure bill. Despite his impending retirement, McHenry is confident that his bill, which seeks to expand the Commodity Futures Trading Commission’s (CFTC) jurisdiction over digital commodities while assigning the Securities and Exchange Commission (SEC) oversight of digital assets tied to investment contracts, can gain momentum during the lame-duck session of Congress. He suggested that the bill could be part of a year-end spending package or the National Defense Authorization Act (NDAA).

Growing Bipartisan Support

McHenry highlighted the growing bipartisan enthusiasm for establishing clear regulatory frameworks around digital assets. The bill received significant support, including votes from 71 Democrats and former Speaker Nancy Pelosi. McHenry emphasized that this level of bipartisan backing is unprecedented for substantial regulatory policy emerging from the House Financial Services or Senate Banking Committees. The bipartisan momentum, he argued, is driven by the need to keep pace with regulatory initiatives in Europe, Japan, Singapore, and other global jurisdictions.

Senate Crypto Regulation Efforts

In parallel efforts, various Senate lawmakers are diligently working on multiple bills aimed at regulating different facets of the crypto industry. Senators Cynthia Lummis and Kirsten Gillibrand have introduced a bill focusing on algorithmic stablecoins and establishing a framework for their regulation. Meanwhile, Senate Agriculture Committee Chair Debbie Stabenow is crafting legislation expected to resume discussions soon.

Key Challenges and Optimistic Outlook

One of the primary challenges in these legislative efforts has been the precise classification of digital assets as either commodities or securities, a point underscored by Senator Lummis. Despite these challenges, Lummis remains optimistic about the chances of passing crypto regulations during the lame-duck session. She suggested that aligning multiple financial services bills, including those on crypto and potentially marijuana banking, could lead to a comprehensive legislative package.

New Legislative Initiatives for NFTs

This week also saw Representative William Timmons introduce a groundbreaking bill addressing the regulation of nonfungible tokens (NFTs). This legislation seeks to define NFTs and establish legal protections for those primarily intended as works of art, musical compositions, literary works, or other forms of intellectual property. This marks a significant step by the U.S. Congress to directly tackle the burgeoning NFT market.

Conclusion

The concerted efforts by U.S. lawmakers to advance crypto and digital asset regulations signify a pivotal moment for the industry. With prominent figures like Patrick McHenry and Cynthia Lummis championing these changes, there is clear momentum towards establishing comprehensive, bipartisan-supported regulatory frameworks. As these legislative discussions evolve, both market participants and regulators will be closely monitoring the developments, anticipating a more structured and predictable regulatory environment in the near future.