Regulation
Crypto Companies Unite to Support FIT21 Bill Ahead of Crucial House Vote
In a concerted effort, many cryptocurrency companies and advocacy groups have urged U.S. lawmakers to support legislation that would delineate the roles of financial regulators regarding digital assets.
Calls for regulatory clarity on crypto
On May 16, approximately 60 companies, represented by the Crypto Council for Innovation (CCI), sent a letter to the leadership of the United States House of Representatives, advocating for the passage of HR4763, known as Innovation financial and technology for the 21st century. (FIT21) Law. This bill, which was approved by the House Financial Services Committee in July 2023, aims to define the regulatory authority of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). ) on digital assets.
The CCI highlighted that while the FIT21 Act would introduce new compliance challenges for digital asset companies, regulatory clarity is essential for consumer safety and a more responsible market. They highlighted the current predicament in which digital asset companies are expected to comply with U.S. securities laws established nearly a century ago, long before the advent of modern technology and the speed of transactions on the Internet.
Key signatories to the letter included Coinbase, Circle, Block, Kraken, Gemini, and Stand With Crypto. The advocacy group also encouraged American voters to contact their representatives to support the bill.
Legislative progress and policy implications
Patrick McHenry, chairman of the House Financial Services Committee, indicated that the FIT21 bill could be ready for a floor vote later this month after it is reviewed by the Rules Committee. That schedule would allow lawmakers to be in session about five days before June.
Notably, several lawmakers, including Rep. French Hill, have already expressed their intention to vote in favor of the bill. In a related development, the House and Senate recently passed a resolution to overturn an SEC rule on how banks should manage digital assets. Despite receiving bipartisan support in Congress, President Joe Biden announced his intention to veto the resolution.
Patrick McHenry, Chairman of the House Financial Services Committee
Senator Cynthia Lummis, a prominent digital asset advocate, noted that the resolution rescinding the SEC rule marked the first standalone crypto legislation passed during this session of Congress. However, it remains unclear whether lawmakers will proceed the same way with the FIT21 law. The White House has not indicated whether President Biden would quickly sign the bill if it passes both the House and Senate.
The potential approval of these two crypto bills comes as the United States prepares for an election year. President Biden and former President Donald Trump, presumptive candidates for the Democratic and Republican parties in 2024, have scheduled two debates on June 27 and September 10, during which cryptocurrency could become a topic of discussion.
International comparison and regulatory advances
Currently, the United States lags behind other countries in establishing a regulatory framework for digital assets. Major economies such as the European Union, United Kingdom, Singapore, Japan, South Korea, United Arab Emirates, Brazil and Australia have made significant progress in this area. Without congressional action to implement effective regulations, American innovators may continue to seek opportunities abroad.
A notable example is the European Union’s Markets in Crypto Assets Act (MiCA), designed to regulate the crypto assets sector. Scheduled to be fully implemented by the end of 2024, MiCA aims to provide greater protection to buyers in the European cryptocurrency market through a comprehensive framework for rules on crypto assets and specific provisions for coins stable. These measures are expected to create a safer and more regulated crypto trading environment. Despite this, the euro still plays a minor role in the cryptocurrency market after the MiCA announcement.
The European Securities and Markets Authority (ESMA) published its latest MiCA regulatory report on March 25, improving the EU’s crypto regulatory landscape. ESMA is now entering the third consultation phase, with all proposed rules open for public comment. This step is part of ESMA’s broader strategy to establish a secure and regulated crypto market in the EU. The final draft law outlines legislative actions implemented across Europe.