Biden administration announces opposition to FIT21

Last updated: May 22, 2024 at 1:33 p.m. EDT | 2 minutes of reading

President Joe Biden’s administration will oppose passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) when it comes to a vote in the House of Representatives, according to a House statement Wednesday. White.

President Joe Biden to oppose FIT21 in vote

The White House statement said FIT21 “lacks sufficient protections for consumers and investors who engage in certain digital asset transactions” but stopped short of vetoing the legislation.

“The administration looks forward to working with Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, that will promote responsible digital asset development and payment innovation and will help strengthen U.S. leadership in the global financial system. “, the press release continues.

The Biden administration’s statement comes just as the House of Representatives is scheduled to vote on whether to advance the key piece of crypto regulation widely supported by the blockchain sector.

If passed, FIT21 would grant greater freedoms to US crypto operators and delegate more regulatory responsibility for digital assets to the Commodity Futures Trading Commission (CFTC).

Meanwhile, critics argue that the adoption of FIT21 could cause market instability and overturn already established securities law.

SEC Chairman Gary Gensler pushes back on crypto regulation bill

On Wednesday morning, U.S. Securities and Exchange Commission Chairman Gary Gensler released its own statement criticizing the bill, saying it would pose “immeasurable risks to investors and financial markets.”

“The crypto industry’s record of failure, fraud, and bankruptcy is not because we have no rules or because the rules are unclear,” Gensler wrote. “That’s because many in the crypto industry don’t play by the rules.”

Gensler and the Biden administration have been criticized for their strict, focused approach to regulating digital assets, with the SEC filing a lawsuit against several large crypto organizations in the past few years alone.

However, new momentum around a handful of crypto legislation on Capitol Hill could mean the beginning of the end of the SEC’s approach to regulation by enforcement.

Last week, both houses of Congress passed a bipartisan resolution that would rescind the federal agency’s controversial SAB121 personnel accounting bulletin, although Biden issued a statement saying he would veto it.

Meanwhile, Republican presidential frontrunner Donald Trump announced that he has apparently embraced cryptocurrency, with his campaign starting to accept crypto donations starting Tuesday.

Alexander Grieve, head of government affairs at Paradigm, noted a change of tone from the White House towards digital assets between the Biden administration’s recent veto announcement and Wednesday’s statement on FIT21, calling it a “huge course correction.”

Despite the efforts of US lawmakers, only time will tell whether or not common-sense crypto regulations will be adopted in the near future.

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