The United States is one of the largest crypto markets in the world, and it has a significant impact on the country’s economy and financial system. Recently, the American authorities have been more active in regulating this sector, taking measures to fight fraud, protect investors, and ensure security. At the same time, there is a lot of discussion and debate about the future of cryptocurrency regulation in the US. The public is eager to accept this new phenomenon, while the government is still hesitant. Everyone is waiting for the decision on the main law regarding cryptocurrency in the US: the Financial Innovation and Technology for the 21st Century Act, or FIT21.
What does the future of the law depend on?
The outcome of the upcoming vote on legislation to regulate the cryptocurrency industry in United States (that is planned for next week) may significantly influence the prospects that the United States Senate will support the legislation, according to Representative Patrick McHenry (R-N.C.), Chairman of the House Financial Services Committee and a prominent proponent of crypto legislation in the last months of his tenure in Congress. He suggested that the key factor to watch would be the number of Democrats who will support the bill.
McHenry, who plans to retire at the conclusion of his term, has made cryptocurrency legislation a priority during his congressional service. To this end, the House has achieved several recent successes in this area, including several relevant bills passed through his committee and his congressional efforts to reverse the crypto accounting policies introduced by Securities and Exchange Commission (SEC).
However, the most significant among the House’s crypto-related initiatives is FIT21. This legislation is progressing towards a long-anticipated final vote in the House in the next few days. This is the most comprehensive crypto bill to advance this far in Congress. If it receives a bipartisan approval, it will represent a significant achievement for the industry in Washington.
“We will have this bill on the House floor next week for a vote. 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,” Representative McHenry said at the DC Blockchain Summit on Wednesday
Still, the bill is not currently expected to receive immediate support from the Senate, meaning it might not become law at once. McHenry suggested that it might happen later, during the so-called “lame-duck” session of Congress, which takes place between the November elections and the conclusion of the session. During this time, legislation has a way of hitching a ride on unrelated bills.
Representative French Hill (R-Ark.), the chair of a crypto subcommittee and a potential candidate to succeed McHenry as chair, expressed optimism regarding the outcome of the House vote on FIT21 during the same event. His optimism stemmed from the fact that 21 Democratic members voted in favor of overturning the controversial SEC crypto accounting provision, Staff Accounting Bulletin No. 121 (SAB 121), despite President Biden’s threat to veto the effort.
“I’m optimistic, and I expect strong Democratic support. This one is about the future,” Hill said about the FIT21.
He explained that the bill was in line with President Biden’s previous executive order calling for legislation in this area.
McHenry agreed that it was a significant development that so many Democrats had opposed the White House and SEC on the accounting rule. At least one senator, Kirsten Gillibrand from New York, had indicated that she would support the resolution to overturn the bulletin when it came up for a vote on Thursday.
Meanwhile in Oklahoma
Kevin Stitt, the Governor of Oklahoma, signed a significant “Bitcoin Rights” bill into law on May 13. This bill recognizes the legal rights of Oklahoma residents to mine, trade, and store cryptocurrencies, and it strengthens the Oklahoma’s reputation as a crypto-friendly state for companies and investors.
The bill was introduced by state Representative Brian Hill and carried in the Senate by Senator Bill Coleman, both Republicans. HB3594 was modeled after a policy developed by the Satoshi Action Fund, a state-focused crypto advocacy group that has helped introduce similar legislation in 15 other states.
The fact that Stitt has signed the bill is a positive development for crypto supporters, given the lack of federal regulation in this area. In the absence of congressional regulation, federal regulators are left to regulate the cryptocurrency industry on their own, often through enforcement actions against companies and developers.
The recent crackdown on cryptocurrency mixers and other privacy tools, as well as criminal charges against developers of Samourai Wallet and Tornado Cash, has led to growing concern that the federal government may eventually take steps to ban self-custody of cryptocurrencies.
Oklahoma’s proposed bill, however, aims to protect the right to self-custody, whether in a self-hosted or hardware wallet. The bill also ensures the ability to use cryptocurrencies to purchase legal goods and services without an additional tax “based solely on the use of the digital asset as the method of payment.”
As one can see, there are two opposing forces in the United States — a government that is resistant to change in principle, and a public that is eager for a new economic approach. It is interesting to see what this confrontation will result in.
