Pelosi Eyes Support for Controversial Crypto Legislation Amid Democratic Opposition

• Former Speaker Nancy Pelosi is reportedly considering supporting the Republican-led FIT21 crypto regulation bill.
• The FIT21 bill aims to clarify the CFTC and SEC regulatory roles.
• Pelosi’s support would contrast with that of prominent Democrats who oppose the bill.

Former Speaker of the House Nancy Pelosi is reportedly contemplating support for a Republican-led crypto bill. The bill in question is the Financial Innovation and Technology for the 21st Century Act (FIT21), which will be brought to the House for a vote on May 22.

According to The American Prospect, sources close to Pelosi suggest that the Speaker Emerita, who has stepped down from her leadership role within the Democratic Party, is leaning towards backing the legislation.

The FIT21 bill, if passed, could have far-reaching implications for the regulation of cryptocurrencies. It aims to clarify the regulatory roles of the Commodity Futures Trading Commission ( CFTC ) and the Securities and Exchange Commission ( SEC ). One of the key changes proposed is the revision of the Howey test, a legal standard used since the 1930s to determine if an asset is a security. This amendment could significantly limit the SEC’s oversight of crypto assets.

The crypto industry has largely welcomed FIT21, viewing it as a solution to the murky regulatory environment surrounding crypto. Mark Hays, a senior policy analyst at Americans for Financial Reform, noted that the bill aligns with the crypto industry’s long-standing wish for a regulatory framework mainly under the CFTC, which has traditionally been more favorable to the sector.

Pelosi’s potential endorsement of the bill would place her at odds with prominent Democrats such as Maxine Waters and David Scott, who oppose FIT21. Despite their opposition, leaked emails indicate that they do not plan to actively dissuade fellow Democrats from supporting the bill.

However, the bill faces criticism from financial reform advocates and anti-crypto Democrats who argue that it could dismantle decades of financial regulations for the benefit of the crypto industry. Hays voiced concerns that the bill’s support might be driven more by the influence of super PACs than by a genuine endorsement of cryptocurrencies.