The House Financial Services Chairman, who will retire from Congress in January, expressed his concerns in a Bloomberg’s Balance of Power interview, emphasizing the urgent need for legislative action on cryptocurrency regulation before the presidential election on November 5, 2024.

The FIT21 bill, intended to classify most cryptocurrencies as commodities under the Commodity Futures Trading Commission (CFTC) jurisdiction, passed the House on May 22 with significant bipartisan support, garnering votes from 71 Democrats and 208 Republicans.

“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,” McHenry remarked.

The crypto industry generally favors the CFTC over the Securities and Exchange Commission (SEC), which oversees cryptocurrencies that aren’t sufficiently decentralized. The passage of FIT21 marks a major step toward establishing a regulatory framework for digital assets in the US.

McHenry highlighted the Senate's unexpected reaction to the bill’s strong support in the House, noting, “For us to pass the important FIT21 bill with a two-thirds vote of the House of Representatives in these divided times is a major statement.” However, the bill faces opposition from the SEC and President Joe Biden.

The Senate, led by Democrat Majority Leader Chuck Schumer, comprises 48 Democrats, three independents who caucus with them, and 49 Republicans. There are no time limits for debating FIT21 in the Senate, and it requires a simple majority of 51 senators to pass.

Bipartisan Stablecoin Bill Efforts

McHenry has been collaborating with Democrat Maxine Waters for nearly two years to advance a stablecoin bill but acknowledged the difficulty of passing it in the Senate without attaching it to a larger bill. He opposed linking it to the SAFER Banking Act, which supports cannabis companies’ access to financial services, stating:

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

With the November 5 presidential election approaching, McHenry and his Republican colleagues plan to pressure Schumer and the Senate to prioritize the FIT21 bill. McHenry emphasized the need for serious policy to regulate cryptocurrency in the US.

The legislative push could significantly impact US crypto regulations, setting a precedent for future regulations. The FIT21 bill aims to provide clearer guidelines for the crypto industry, promoting growth, innovation, investor protection, and market stability.