QUICK TAKE

• Eight House Democrats have endorsed a Republican-driven bill to regulate U.S. crypto markets.
• The U.S. House will vote on the Financial Innovation and Technology for the 21st Century Act (FIT21) on Wednesday.
• The bill’s fate in the Senate remains uncertain.

The U.S. House of Representatives is on the cusp of voting on a significant piece of cryptocurrency legislation with broad bipartisan support. This milestone comes as eight House Democrats actively push their colleagues to support the Financial Innovation and Technology for the 21st Century Act (FIT21), a bill primarily driven by Republicans aimed at establishing comprehensive regulations over the crypto markets.

A Crucial Vote in the House

On Wednesday, the House is expected to discuss and vote on FIT21, marking the first major legislative attempt to regulate digital assets in the United States. This vote represents a critical moment for the cryptocurrency industry, as approval in the House would send the bill to the Senate, where its future remains unclear.

According to a memo shared with CoinDesk by a congressional aide, at least eight House Democrats have expressed strong support for the bill. These lawmakers—Reps. Wiley Nickel (D-N.C.), Yadira Caraveo (D-Colo.), Jim Himes (D-Conn.), Jasmine Crockett (D-Tex.), Ritchie Torres (D-N.Y.), Darren Soto (D-Fla.), Josh Gottheimer (D-N.J.), and Don Davis (D-N.C.)—are urging their Democratic colleagues to join them in voting yes.

“As Democrats, we feel this is a crucial opportunity to regulate the digital asset markets,” the lawmakers stated in their internal memo on Tuesday. They emphasized that this should not be a partisan issue and called for unified support.

Bipartisan Support and Senate Uncertainty

Despite the bipartisan backing in the House, the Senate’s stance on the crypto market-structure legislation remains uncertain. Senior staff members from the House Financial Services and Agriculture committees, who are working on the bill, have reported increased discussions with their Senate counterparts. They are also exploring potential legislative vehicles to which the bill could be attached as the congressional session approaches its end.

Rep. Patrick McHenry (R-N.C.), chairman of the House Financial Services Committee, has been a key figure in advancing the bill. Speaking to reporters on Tuesday, he expressed frustration over the delay in bringing the bill to a vote, which was initially intended to occur nearly a year ago. “We’re now in May of an election year,” McHenry noted, emphasizing the urgency of the vote.

However, McHenry remains optimistic about the growing awareness among lawmakers regarding the existence and influence of crypto voters. He believes this awareness will bolster support for the bill.

The Substance of FIT21

FIT21 aims to create a clear regulatory framework for digital assets in the U.S., defining how each token and exchange will be regulated. The bill includes provisions for consumer protections, disclosures, and measures to address the use of cryptocurrencies in illicit finance. The upcoming vote will be the first time such a comprehensive piece of crypto legislation has reached a final decision in either chamber of Congress.

Implications for the Crypto Industry

If passed, FIT21 would represent a significant step forward in regulating the rapidly evolving crypto industry. The bill’s clear regulatory guidelines could provide much-needed clarity for businesses and investors, potentially fostering greater innovation and growth within the sector.

However, the bill’s journey is far from over. Even with a favorable vote in the House, the Senate’s approval remains a crucial hurdle. The crypto community and industry stakeholders will be closely monitoring the developments, understanding that the outcome of this legislation could have profound implications for the future of digital assets in the United States.

As the House prepares for this pivotal vote, the bipartisan support for FIT21 underscores the growing recognition of the importance of regulating the crypto markets. The legislation represents a crucial opportunity to establish a robust regulatory framework that can support the industry’s growth while protecting consumers and maintaining the integrity of the financial system.

The upcoming vote will be a defining moment for the crypto industry, potentially setting the stage for further regulatory developments and shaping the future of digital assets in the U.S.