FIT21 Act Passes House: A Milestone for US Digital Asset Regulation
How Will the FIT21 Act Impact Crypto Markets?
On May 22, the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century (FIT21) Act. The bill, H.R.4763, aims to provide regulatory clarity for digital assets by defining the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The legislation was approved with a 279 to 136 vote, with 71 Democrats joining 208 Republicans in favor.
The Need for Clear Regulations
Representative Patrick McHenry advocated for the FIT21 Act, emphasizing the current regulatory confusion.
"The SEC and the CFTC are currently in a food fight for control of these asset classes," McHenry remarked.
He stressed that the existing framework is stifling innovation in the digital asset space.
Concerns from the Opposition
Representative Maxine Waters opposed the bill, arguing it could lead to a "regulatory no man’s land" for cryptocurrencies. Waters warned that the bill might allow traditional finance firms to bypass SEC oversight, potentially causing market instability.
"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," she stated.
What’s Next on the Agenda?
The House will also discuss H.R. 5403, the Central Bank Digital Currency (CBDC) Anti-Surveillance State Act, which would prohibit the Federal Reserve from issuing a digital dollar through intermediaries. Democratic leaders have expressed disapproval of both the FIT21 and anti-CBDC bills but have decided not to actively oppose their passage.
The Bigger Picture
This legislative activity comes as digital assets become more prominent, especially as the U.S. approaches an election year. The SEC's pending decision on a spot Ether (ETH) exchange-traded fund is also key. With digital assets on the minds of many voters, the regulatory landscape is a hot topic.
President Joe Biden and former President Donald Trump, the frontrunners for the Democratic and Republican Parties in 2024, have agreed to debates on June 27 and September 10, where these issues will likely be discussed.
The passage of the FIT21 Act in the House marks a crucial moment for digital asset regulation, setting the stage for further debates and decisions that will shape the industry's future.
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Also Read
FIT21 Bill’s Senate Journey: What It Means for XRP’s Decentralized Status
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