FIT 21 Passes House In Watershed Moment For Digital Assets; White House Gets Conciliatory

FIT 21 – passage

The long awaited vote on the digital asset market structure bill known as “Financial Innovation and Technology for the 21st Century” or FIT 21 [H.R.4763] finally took place yesterday just before 6 p.m. ET.

Final tally 279-136 in favor of passage. 15 Members did not vote.

Signaling still more momentum for digital assets in Congress, Democratic support totaled 71 votes – well beyond the 21 House Dem votes recorded in favor of H.J.R.109 rescinding the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 two weeks ago.

Reps. Nancy Pelosi (D, CA), Adam Schiff (D, CA), Democratic Caucus Chair Pete Aguilar (D, CA) and House Minority Whip Katherine Clark (D, MA) were among the Democratic surprises to support the bill.

Republicans were nearly unanimous in support of FIT 21.

Reps. Andy Biggs (AZ), Nick Lalota (NY) and Matt Rosendale (MT) were the Republicans voting “no.”

Visit the Clerk’s website for FIT 21’s complete tally.

This was another victory for HFS Chair Patrick McHenry (R, NC) as well as House Ag Chair Glenn “GT” Thompson (R, PA).

more tips:

    • House Passes Financial Innovation and Technology for the 21st Century Act with Overwhelming Bipartisan Support –
    • Emmer Celebrates the Passage of the Securities Clarity Act in the FIT 21 Act –

FIT 21 – staff

    • “And [thanks] to those who did the heavy lifting, especially: Allison Behuniak, Tim Hite, and Paul Balzano.” – Rep. Warren Davidson (R, OH) on X
    • “Incredible bipartisan support for [FIT 21]!” (photo)- Tim Hite on X
    • “FIT21 was so bipartisan it could have gone on suspension, where 2/3rds of Members vote in favor.” – Michael Cameron on X

FIT 21  – next steps

Next steps for FIT 21 three weeks ago would have been nowhere. Senate Democratic leadership would never have been expected to bring it to the Senate floor for a vote.

But now, with the results in the House, and with Senate Majority Leader Chuck Schumer (D, NY) already voting in favor of the pro-crypto SAB 121 resolution and Senate Banking Chair Sherrod Brown (D, OH) perhaps concerned about his own re-election against a candidate (Bernie Moreno (R)) who has professed support for digital assets… who knows?

More than ever Members of Congress likely believe that votes are at stake in the November election, let alone campaign dollars.

House Republican leaders also said in a press conference on Tuesday that they could see the bill riding a must-pass in the Fall.

White House turnaround

Yesterday morning, the Biden Administration seemingly repudiated the oft-spoken words of SEC Chair Gary Gensler (“no additional framework necessary”) and said it wanted to work on a digital assets framework with Congress but FIT 21 wasn’t it -though no veto was mentioned.

From the statement: “The Administration is eager to work with Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, which will promote the responsible development of digital assets and payment innovation and help reinforce United States leadership in the global financial system.” See it.

Arguably, this is huge progress with Dem leadership for pro-crypto advocates. Paradigm policy exec Justin Slaughter said on X, “This is the most positive statement by this or any White House on crypto, ever.”

Entrepreneur and TV personality Mark Cuban retweeted Slaughter’s tweet saying, “I think this is just the start of the shift. [Rep. Patrick McHenry,] Make the call to the WH and lead the change!” Read it.

In some ways, Cuban is the Democrats’ version of Donald Trump: he holds sway with a large part of the electorate who have gotten to know and admire Cuban after years of television appearances.

what you should know: The White House announcement is recognition that the Administration can’t afford to lose votes to Trump over crypto. Mark Cuban’s words on May 10 may have played a part. At that time, Cuban famously tweeted, “If [Joe Biden] loses, there is a good chance you will be able to thank [Gary Gensler] and the [SEC]. Crypto is a mainstay with younger and independent voters. Gensler HAS NOT PROTECTED A SINGLE INVESTOR AGAINST FRAUD.”

FIT 21 – Gensler

With reports that his regulatory rival, CFTC Chair Rostin Behnam, had been meeting with Members of Congress encouraging them to vote in favor of FIT 21, SEC Chair Gary Gensler fired off one more salvo rejecting the digital asset market structure bill early yesterday morning. Read the statement.

Gensler’s statement came several hours before the White House’s statement on FIT 21.

what you should know: Given the White House’s shift in opinion on crypto, it does not seem farfetched that Chair Gensler could be removed before the election if it helps garner votes.

FIT 21 – floor debate

The debate largely went as you would have expected a month ago. But, given the events of the past 3 weeks – such as SAB 121 resolution passing both Houses of Congress, President Biden‘s statement on FIT 121 yesterday and even former President Trump‘s apparent embrace of crypto two weeks ago – you might have expected a softer tone.

Dem leadership was unrelenting with little room for compromise. As example, Rep. Stephen Lynch (D, MA) reiterated a comment from a previous HFS hearing that FIT 21 was one of the worst bills he’s ever seen.

But, several Dems spoke on the Floor in favor of FIT 21 providing a contrast in views to Dem leadership including Reps. Wiley Nickel (D, NC), Josh Gottheimer (D, NJ) and Yadira Caraveo (D, CO), who is Ranking Member of House Ag’s subcommittee with oversight of digital assets.

next week – Consensus and DC

CoinDesk’s Consensus 2024 conference is expected to draw thousands next week to Austin, Texas, and politicians and policy pros will be there in force. CoinDesk’s Nikhilesh De previews the show in his “State of Crypto” newsletter. Read more.

De says that the industry conclave will include a policy summit with participants SEC Commissioner Hester Peirce, CFTC Commissioner Summer Mersinger, Sen. Bill Hagerty (R, TN) and Rep. Raja Krishnamoorthi (D, IL) among others. Also appearing at the wider conference are Treasury Under Secretary for Terrorism and Financial Intelligence Brian Nelson, Sen. Ron Wyden (D, OR) and a parade of aspiring candidates including Senate Banking Chair Sherrod Brown’s (D, OH) challenger, Bernie Moreno (R).

And, see full agenda.

what you should know: DC’s robust presence at Consensus this year (similar to 2022, pre-FTX implosion) is a sharp turnaround from last year’s muted participation. Digital assets policy momentum has returned and politicians see votes in play.

today – CBDC vote

The “CBDC Anti-Surveillance State Act” [H.R.5403] from Majority Whip Tom Emmer (R, MN) will get a House Floor vote today according to House Majority Leader Steve Scalise’s (R, LA) Floor calendar.

The bill is expected to be strongly – if not unanimously – supported by Republicans.

On the Democratic side, Minority Whip Katherine Clark has advised her caucus to vote “no.”

The live stream will be available on The vote is expected around 1 p.m. ET.

Sen. Lummis on majority

“There is a bipartisan majority in both chambers of Congress in favor of crypto… The future is very bright…” – Sen. Cynthia Lummis (R, WY) on X yesterday

letter – Chair Gensler

Prometheum and the SEC Chair Gary Gensler have once again drawn the ire of Republican leaders of the House Financial Services (HFS) Committee.

HFS Chair Patrick McHenry, Rep. Bill Huizenga (R, MI) and Rep. French Hill (R, AR) sent a new letter yesterday to Chair Gensler following up a similar March 26 letter.

In a nutshell, House Republicans say they aren’t getting any response from the regulator on the intersection of Prometheum’s SPBD (special purpose broker-dealer) license and the SEC’s classification of Ether as a security or commodity. Prometheum’s recent announcement that it was launching custody for crypto “securities” has raised jurisdictional alarm bells.

what you should know: Answers to questions in the most recent letter are due June 5. Another House SEC Oversight hearing with Chair Gensler may not be far behind.

still more tips

Tuesday’s Dem memo: “Democrats Support H.R. 4763, the ‘Financial Innovation and Transparency Act of the 21st Century’ (FIT21)” (PDF) – Rep. Wiley Nickel (D, NC) and others via Politico

Joe Lubin drops hints about how MetaMask developer Consensys would go public – DL News

Opinion: On-Chain Ads Are Finally Here, in a Win for Privacy and User Experience – Antonio Garcia Martinez, author of “Chaos Monkeys” on CoinDesk