Report: Nancy Pelosi considering backing FIT21 crypto bill proposed by Republicans

Former Speaker of the United States House of Representatives, Nancy Pelosi, is allegedly considering endorsing the Financial Innovation and Technology for the 21st Century Act (FIT21), a crypto bill led by Republicans. According to sources familiar with Pelosi’s thoughts, she may lend her support to the bill, which is expected to be voted on by the House on May 22, as reported by The American Prospect on May 21. FIT21 aims to clarify the division of authority over crypto assets between the Commodity Futures Trading Commission and the Securities and Exchange Commission. Additionally, if passed, the bill would modify the Howey test, a legal standard that determines the status of assets as securities, and reduce the SEC’s oversight of the crypto industry. The bill has received positive feedback from the crypto industry, as it is believed to bring much-needed clarity to the regulatory landscape for digital assets. Mark Hays, a senior policy analyst at Americans for Financial Reform, stated that the bill aligns with the industry’s desires by establishing a regulatory framework primarily governed by the CFTC, which has been more accommodating towards the crypto sector. Pelosi’s support for the bill would put her at odds with ranking Democrats Maxine Waters and David Scott, who oppose it. However, leaked emails indicate that they will not pressure House Democrats to vote against it. This reported endorsement from Pelosi marks the Democrats’ growing interest in the crypto space, with some analysts speculating that it could influence the SEC’s stance on approving spot Ether (ETH) funds, in an attempt to win support from pro-crypto voters. Nevertheless, critics argue that the bill would undermine decades of financial regulations to favor the crypto industry. Financial reform groups and anti-crypto Democrats view the bill as a response to the influence of super PACs, which are political action committees that can raise unlimited funds to support pro-crypto candidates in the upcoming U.S. election. Elizabeth Warren, a Democratic Senator, and financial reform groups perceive these super PACs as a threat, as crypto continues to play a larger role in this year’s elections. On May 21, Representative Wiley Nickel of North Carolina urged lawmakers to back FIT21 in order to prevent the SEC from turning crypto regulation into a political issue. The question remains whether SEC Chair Gary Gensler will have the final say in crypto regulation.