The result of next week's expected vote on U.S. legislation to regulate the cryptocurrency industry will strongly influence the odds the U.S. Senate gets on board, said Rep. Patrick McHenry (R-N.C.), the chairman of the House Financial Services Committee and a leading advocate for crypto legislation in the waning months of his career in Congress.
The thing to watch, he suggested, is if a lot of Democrats show up to support the bill.
McHenry, who is set to retire at the end of the year, has made digital assets legislation a top priority for the end of his time on Capitol Hill. To that end, the House has recorded a number of recent cryptocurrency successes, from the passage of several relevant bills through McHenry's committee to the advancement of a congressional effort to overturn Securities and Exchange Commission (SEC) crypto accounting policies.
But chief among the House's digital assets endeavors is the Financial Innovation and Technology for the 21st Century Act, or FIT21, which is heading toward a long-awaited vote for final approval in the House of Representatives in the coming days. That's the most comprehensive U.S. crypto bill to move this far through Congress and, if it's approved in a bipartisan vote in the House, will represent a high-water mark for the industry's efforts in Washington.
"We will have this bill on the House floor next week for a vote," McHenry said at the DC Blockchain Summit on Wednesday. "The outcome of that vote will dictate what kind of attention it'll get in the Senate and whether or not we can get something done."
However, the bill isn't expected to find a ready match in the Senate, so far, meaning it wouldn't immediately be on a path to become law. However, McHenry suggested "who knows what's going to happen" in the so-called lame-duck session of Congress between the November election and the end of the session, when legislation has a way of hitching a ride on unrelated bills.
Rep. French Hill (R-Ark.), who heads a crypto subcommittee and is among the candidates who could replace McHenry in his chairman seat, said at the same event on Wednesday that he's optimistic about the outcome of the House vote on FIT21. One of the big reasons: 21 Democrats chose to vote in favor of overturning the SEC's controversial crypto accounting provision – Staff Accounting Bulletin No. 121, or SAB 121 – despite President Joe Biden's threat to veto the effort.
"I'm optimistic, and I expect strong Democratic support," Hill said of the FIT21. "This one is about the future."
Hill said it also answers President Biden's executive order from earlier in his term that called for legislation in this space.
McHenry agreed that getting so many Democrats to buck the White House and SEC on the accounting rule was "a significant thing." At least one Senate Democrat – New York's Kirsten Gillibrand – has said she'll support the resolution to overturn the bulletin when it comes up for a vote on Thursday.
