In a significant step towards regulatory clarity for digital assets, the United States House of Representatives has voted in favor of the Financial Innovation and Technology for the 21st Century Act (FIT21).
Bipartisan Approval for Regulatory Clarity
On May 22, House lawmakers passed H.R.4763, the FIT21 Act, with a vote of 279 to 136. This legislation aims to establish clear regulatory roles for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) regarding digital assets. Notably, the bill received bipartisan support, with 71 Democrats joining 208 Republicans in favor of the measure.
“Unfortunately, our current regulatory framework is preventing digital assets’ innovation from reaching its full potential,” said Representative Patrick McHenry before the House vote. “The SEC and the CFTC are currently in a food fight for control of these asset classes.”
Opposition and Concerns
Despite the strong support, there was notable opposition to the bill. Representative Maxine Waters voiced her concerns, arguing that the FIT21 bill could lead to a lack of proper oversight.
“This [bill] is perhaps the worst, most harmful proposal I have seen in a long time,” said Representative Waters. “This bill would deregulate crypto and certain traditional securities to the extent that I and other experts have expressed serious concerns about this bill causing a potential market crash and recession.”
Future Legislative Discussions
The House is also set to discuss and vote on H.R. 5403, the Central Bank Digital Currency (CBDC) Anti-Surveillance State Act. This bill aims to prohibit the Federal Reserve from issuing a digital dollar through intermediaries. Democratic Party leadership has indicated opposition to both the anti-CBDC bill and the FIT21 bill but has decided not to enforce strict party-line voting.
Broader Implications and Context
The passage of the FIT21 Act in the House comes at a crucial time, with the United States moving deeper into an election year. Digital assets are becoming an increasingly significant topic for many voters. The SEC’s pending decision on a spot Ether exchange-traded fund also adds to the growing focus on cryptocurrency regulation.
President Joe Biden and former President Donald Trump, the likely candidates for the Democratic and Republican Parties in 2024, have agreed to two debates scheduled for June 27 and September 10, where such issues may come to the forefront.
Next Steps for the FIT21 Act
For the FIT21 Act to become law, it must still pass through the Senate and be signed by President Joe Biden. If successful, this legislation could provide much-needed clarity and structure to the regulation of digital assets in the United States, potentially fostering greater innovation and stability in the crypto market.
The approval of the FIT21 Act marks a pivotal moment for the regulation of digital assets, reflecting a growing recognition of the need for clear and effective regulatory frameworks to support the burgeoning cryptocurrency industry.
