Nancy Pelosi Contemplates Backing Republican-led Crypto Legislation, FIT21
Summary:
Nancy Pelosi, former Speaker of the House, is considering supporting the Republican-led Financial Innovation and Technology for the 21st Century Act (FIT21) which aims to clarify crypto regulation. The bill proposes changes to the 90-year-old Howey Test, potentially putting crypto mostly outside of the SEC's purview. FIT21 is favored by the crypto industry for clarifying the unclear regulatory framework for digital assets. Meanwhile, critics argue the bill could dismantle long-standing financial regulations to benefit the crypto industry. Pelosi's support could signal growing acceptance of crypto within the Democratic Party, although some argue it's an effort to counter promise threats from super PACs supporting pro-crypto candidates.
Nancy Pelosi, former Speaker of the United States House of Representatives, is said to be considering backing the Republican-driven crypto legislation, known as the Financial Innovation and Technology for the 21st Century Act (FIT21). According to The American Prospect, a U.S. political publication, on May 21, Pelosi, who is now a Speaker Emerita and no longer holds a leadership role in the Democratic Party, may support the legislation that is set for a House vote on May 22, based on individuals who have knowledge of her considerations.
FIT21 aims to provide clear guidelines on how the Commodity Futures Trading Commission and the Securities and Exchange Commission divide their jurisdiction over cryptocurrency assets. In the scenario it becomes law, the legislation would also transform the Howey test, a near-century old legal criteria used to classify assets, taking the majority of cryptocurrency mostly out of SEC jurisdiction.
The proposed law has been well received by the cryptocurrency sector, with many believing that it will help clear up the presently murky regulatory framework governing digital assets. As reported to The American Prospect by Mark Hays, a senior policy analyst specializing in fintech at Americans for Financial Reform, this bill provides the industry what it's been desiring for quite some time: a regulatory landscape largely governed by the CFTC, known for its more accommodating stance towards the sector.
Pelosi's endorsement of the bill means she would be opposing top-ranking Democrats Maxine Waters and David Scott, both of which are against the bill. However, internal emails reveal they won't encourage other House Democrats to reject the bill.
Pelosi's alleged pro-crypto bill support indicates a further acceptance of cryptocurrency within the Democrats, with some insiders suggesting it's another attempt to win over the approval of pro-crypto voters, for instance, a potential SEC change of course on spot Ether (ETH) fund approvals. On the contrary, Democrat critics of crypto and financial reform organizations argue that this legislation would dismantle long-established financial regulations for the benefit of the cryptocurrency industry. "This isn't about being pro-crypto, but about handling the threat posed by promises from super PACs," Hays added.
The cryptocurrency sector is making use of super PACs, or political action committees, capable of raising unlimited funds, to bolster pro-crypto candidates in the forthcoming U.S. election. This development is considered threatening by opposition Democrats such as Senator Elizabeth Warren and financial reform organizations, given the increasingly significant role of cryptocurrency in this year's electoral cycle. On May 21, North Carolina Representative Wiley Nickel urged fellow legislators to back FIT21 in order to prevent the SEC from politicizing cryptocurrency regulation.
Published At
5/22/2024 7:48:02 AM
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