Speaker Emeritus Nancy Pelosi (D-Calif.) is considering voting in favor of the Republican-backed cryptocurrency bill when it comes to a vote in the House this week, a source familiar with her thinking said. revealed.
The bill, known as the Financial Innovation and Technology for the 21st Century Act (FIT 21), was put together by Republicans on the House Financial Services Committee and represents the most comprehensive effort to regulate cryptocurrencies to date, mostly along industry-friendly lines. Experts say the bill could also open loopholes for other financial products beyond cryptocurrencies. Outlook. The Rules Committee on FIT 21 will meet later today, with a floor vote possible as early as Wednesday.
Although Pelosi is no longer part of the Democratic leadership, her opinions still carry weight among many House Democrats. She also remains one of the Democratic Party's most prodigious fundraisers, with the crypto industry providing significant campaign contributions over the past two election cycles. House Republicans' decision to give FIT 21 a vote will give crypto PACs a clear sense of where members of Congress stand on the issue by November and set spending goals accordingly. becomes possible.
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If Pelosi supports the bill, she will join the ranking Democrats on the Financial Services Committee, Rep. Maxine Waters (D-Calif.), who opposes FIT 21, and another ranking member, Brad.・He will part ways with Congressman Sherman (D-Calif.). in Pelosi's California delegation. In a communication to House Democrats, leadership did not explicitly say they would force a vote on the bill, only that Waters and other senior lawmakers “strongly” opposed it.
In 2022, Pelosi will manage House Majority PAC, a super PAC supporting House Democrats, and will hire disgraced crypto billionaire Sam Banks to support candidates in Oregon's open-seat Democratic primary. Received $6 million from Mr. Mann Freed. (That candidate, Carrick Flynn, lost the primary.) Pelosi personally received $2,900 from Nishad Singh, director of engineering at FTX, Bankman Freed's bankrupt cryptocurrency exchange. Ta.
Coinbase, one of the major currency exchange platforms, currently has no physical office, but spent its first eight years as a company based in San Francisco, Pelosi's district. Coinbase CEO Brian Armstrong has previously campaigned for deregulation of cryptocurrencies in Washington, and even posed for a selfie with Pelosi in 2021. The company was named in a coalition letter supporting FIT21 sent to House leadership last week.
In response to questions from OutlookPelosi's press secretary, Aaron Bennett, said he did not yet have an answer on Pelosi's position on the bill.
FIT 21 addresses the threshold issue Cryptocurrency Regulation: Anything considered a commodity is regulated by the light-touch Commodity Futures Trading Commission (CFTC). What is considered a security is also subject to stricter oversight by the Securities and Exchange Commission (SEC).
The bill would define all digital assets on “decentralized” blockchains as a commodity and give the CFTC regulatory authority over spot markets for cash or cryptocurrencies. This definition means that most digital currencies and coins fall under the CFTC's regulatory regime, with some exceptions to SEC regulations even for cryptoassets that are defined as securities. It will be. Stablecoins are pegged to the dollar and are used to facilitate cryptocurrency trading, but will have limited federal regulatory oversight.
In other words, this bill delivers what the industry has long sought: a regulatory regime primarily led by the CFTC, which is much more permissive to the industry. The coalition letter says the bill will help “accelerate the growth of blockchain technology and digital assets, promote financial inclusion, and protect national security.”
Waters and other Democrats held a briefing for lawmakers and staff on FIT21 on Monday, strongly rejecting the bill. Financial reform groups have been attacking it for months. “Rather than creating regulatory standards for the crypto industry, this is a bill that seeks to rewrite financial regulation to benefit cryptocurrencies,” said Fintech Director at Americans for Financial Reform. said Mark Hayes, senior policy analyst.
This bill provides what the industry has long sought: a much more permissive regulatory regime led primarily by the CFTC.
In particular, advocates have taken issue with Title II of the bill, which changes the long-established “Howie test” for determining what counts as a security. The Howey test states that a security is “an investment of money in a common enterprise with a reasonable expectation of receiving a profit from the efforts of others.” However, FIT 21 would change the standards for digital assets that have been in place since the Securities Exchange Act of 1934. That would allow them to escape SEC scrutiny.
Hayes said this “creates a roadmap for other players on Wall Street to use the same rubric,” which means that other investment contracts whose assets are exempt from securities laws are in crypto. This means that it may be created using something other than currency.
As she evaluates the bill, Pelosi may not have 90-year-old financial regulation laws in mind, but the realities of 21st century elections.as Outlook Bankman Fried's criminal fraud conviction did not slow down the crypto money train in the Democratic primary, as reported by Bankman Fried. As of April, the industry had raised $80 million toward the 2024 election. In recent days, a number of Democratic politicians, from Sen. John Fetterman (D-Pennsylvania) to Rep. Ritchie Torres (D-N.Y.), himself a sponsor of FIT 21, have supported the crypto industry. Selected.
This effort has paid off for cryptocurrency companies. Last week, 32 Democrats in the House and Senate joined Republicans in voting for a resolution to rescind the SEC's guidance on cryptocurrency accounting, but President Biden has vowed to veto the resolution. . Pelosi was not among the 21 House Democrats who voted in favor of the resolution, but Senate Majority Leader Chuck Schumer (D-N.Y.) did vote in favor.
Schumer also tried unsuccessfully to finalize a deal that would include industry-favored legislation regulating stablecoins in the FAA reauthorization bill. Schumer is not trying to protect Democratic Sens. Sherrod Brown (D-Ohio) and Jon Tester (D-Mont.) from re-election, whose campaign funds are threatened by the cryptocurrency industry. There was some speculation that.
During this year's Senate campaign, Rep. Adam Schiff (D-Calif.), a Pelosi protégé, added a pro-cryptocurrency message to his campaign website, saying, We will continue to be a world leader.” technology. As a result, he received an “A” rating from an outside group called Stand With Crypto, and his primary Democratic opponent, Rep. Katie Porter (D-Calif.), received $10 million in industry-funded funding. I was a victim of negative advertising.
Several House Democrats have already signed up, including Rep. Ro Khanna (D-Calif.) and co-sponsor Rep. Torres, Rep. Wiley Nickell (D-North Carolina), and recently sworn-in Rep. Henry Cuellar (D-Texas). He has come forward to support FIT21. He was charged with bribery. Support from House Democrats could determine whether the Senate feels the need to take up the bill, but that currently appears unlikely. Pelosi's decision will, to a large extent, determine where the numbers end up.
Hayes said Democrats' decision-making is driven by the potential financial benefits of supporting cryptocurrencies and the vitriol of opposing them. “This is not about supporting cryptocurrencies, it’s about navigating the threat of super PAC promises.”
