Regulation
American CBDC, FIT21 crypto bills: “lip service” or balanced regulation?
- The United States House of Representatives passed the FIT21 Act to clarify crypto regulations.
- The next issue is the US CBDC bill and how the US Senate handles both.
US crypto regulation has seen significant progress as digital assets have become a political and controversial issue in the run-up to the US elections.
Following the successful repeal of the SEC’s Staff Accounting Bulletin 121 (SAB 121) on May 16, further progress was made this week on crypto regulation.
On May 22, the U.S. House of Representatives voted and passed the Financial Innovation and Technology for the 21st Century Act, known as the Financial Innovation and Technology for the 21st Century Act. FIT21 law. Despite President Joe Biden’s opposition to the FIT21 crypto bill, it passed with bipartisan support.
FIT21 crypto bill
The FIT21 bill aims to establish a regulatory framework for digital assets in the United States. The bill notably aims to hand most crypto oversight to the CTFC (Commodity Futures Trading Commission), an entity considered less hostile to the industry than the SEC.
However, the SEC will retain authority over digital assets that meet the definition of “security.” Coinbase founder Brian Armstrong called the FIT21 law update “”historic vote‘ for regulation and clarity of cryptography if passed into law.
“Historic vote today on the FIT21 bill in the House of Representatives, which will finally begin to create clear rules to regulate crypto”
The Blockchain Association, for its part, described the development as “decisive moment‘ for the crypto industry.
Interestingly, this update also sparked reaction from the White House. The administration has expressed opposition to the FIT21 Act but maintained its commitment to working toward a “balanced” regulatory framework for digital assets.
Reacting to the White House statement, Bloomberg ETF analyst James Seyffart called it “reluctanlty.’
“What are the chances it’s just lip service?” I guess time will tell.”
The next stop for the Republican-sponsored FIT21 Act will be the Senate. However, market watchers say progress could stall until the next Congress resumes it in January 2025.
After the FIT21 law, the House will vote on the American CBDC
The US House of Representatives will now vote on another crypto bill, the CBDC Anti-Surveillance State Act, RH 5043, this week. The bill seeks to prohibit the Federal Reserve from issuing CBDC (Central Bank Digital Currency), also known as the digital dollar, or using it as a monetary policy tool.
The bill was introduced by Tom Emmer, the Republican majority whip in the House, who maintained that the US CBDC pushed by the Fed would threaten the privacy of Americans.
“The Biden administration has proven that it is eager to trade Americans’ right to privacy for a PCC-style CBDC surveillance tool.”
If both bills pass the U.S. House and Senate and become law, they could provide the regulatory clarity the industry has long sought.