What's Next for FIT21? (A Consensus 2024 Recap)

CoinDesk held its annual Consensus conference in Austin, Texas last week, where we heard from lawmakers and regulators, developers, company execs and all sorts of other people in and around this sector. One topic of discussion: the Financial Innovation and Technology for the 21st Century Act. Its passage through the House sent a surge of excitement through the crypto industry as a sign of progress, even if it's not likely to become law just yet.

And on another note, I wanted to thank everyone who said hi to me at Consensus last week. It was great seeing all of you.

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Next steps

The narrative

Reps. Patrick McHenry and Tom Emmer, and Sen. Ron Wyden weighed in on the Financial Innovation and Technology for the 21st Century Act (FIT21) during their various sessions last week.

Why it matters

One major topic of discussion was the House's passage last month of the Financial Innovation and Technology for the 21st Century Act, a market structure bill that would, if signed into law, dramatically reshape the regulatory frameworks governing crypto businesses and operations in the U.S. This bill's chances – any bill's, really – of moving through the Senate are slim.

Breaking it down

Moving a bill through the Senate is a complex process. As CoinDesk has reported before, the Senate may want to start from scratch on a market structure bill, meaning it would have to go through a full committee process.

Even if the current version of the bill goes to the floor, the Senate is likely to change provisions or other aspects of the bill, House Majority Whip Tom Emmer (R-Minn.) told the audience last week. In that event, the bill would move back to the House.

"Right now my best bet would be if we get this done this year, it's probably more likely during the lame duck once the dust settles and everybody who's wearing their jerseys now recognizes we got to get moving on," he said.

Rep. Patrick McHenry (R-N.C.), who chairs the Financial Services Committee, said he expects legislation to be signed within the next year, pointing to the sheer amount of support FIT21 received (279 votes in favor).

"The White House not issuing a veto threat on FIT21 was helpful and good, and it shows that they want to be at the table and policy here," he said. "The Senate is a more complicated beast. It always is."

The next step for the bill's proponents, he said, is to reach out to Senators about the legislation.

"If we can get two-thirds of the House to vote for this bill, they should be able to get two-thirds of the Senate to vote for this bill or something very similar," he said.

Sen. Ron Wyden (D-Ore.), one of the Democrat lawmakers who voted to overturn the Security and Exchange Commission's Staff Accounting Bulletin 121, said of FIT21 that "what you really need is a regulatory framework."

"That's what Chairman McHenry is trying to do," he said. "You need to be tough on the scamsters, and the rip off artists."

"It's unclear how far that bill will move, but I think Chairman McHenry is right to establish a kind of regulatory framework and put a sharper focus on fighting fraud and ripoff artists," he said.

Over the next few weeks, this newsletter will include transcripts from some of the conversations held at Consensus.

Stories you may have missed

• Wall Street Asks Biden Not to Veto Congress' Rejection of SEC Crypto Policy: A group of lawmakers and a group of banking organizations sent two separate letters to U.S. President Joe Biden on Friday, asking him to sign House Joint Resolution 109 to overturn the SEC's Staff Accounting Bulletin 121 instead of vetoing it, as he had threatened to.

• U.S. President Biden Vetoes Resolution Overturning SEC Guidance: U.S. President Joe Biden vetoed H. J. Res. 109 on Friday, as he had threatened to.

• Terraform, Do Kwon Agree in Principle to Settle Fraud Case With SEC: Court Filing: After a jury found Terraform Labs and Do Kwon liable for fraud, the company has come to an agreement with the SEC.

• Flood of Cash from Coinbase Gives Crypto One of the Biggest Campaign War Chests: Coinbase, Ripple and Andreessen Horowitz have each donated $25 million to Fairshake, a crypto-focused political action committee, and its affiliates over the last week. The PAC now has more than $161 million, one of the largest cash stockpiles for the 2024 election.

This week

Tuesday

• 14:00 UTC (10:00 a.m. ET) The CFTC's Global Markets Advisory Committee met Tuesday, though crypto wasn't a major part of the agenda. Basel III Endgame was, though!

Wednesday

• 13:00 UTC (9:00 a.m. ET) The House Financial Services Committee will hold a subcommittee hearing on tokenizing real-world assets.

Elsewhere:

• (The Washington Post) There's a lot to consider in this story about Post reporters' efforts to have AI tools create photos of women, ranging from data collection practices to data availability to just how the internet experience might be for people.

• (Minnesota Reformer) This is a bizarre situation out in Minnesota – someone reportedly attempted to bribe a juror in a high profile trial, leading to that juror being excused, the rest of the jury being sequestered and the defendants being taken into custody.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Twitter @nikhileshde.

You can also join the group conversation on Telegram.

See ya’ll next week!