Regulation
What’s next for crypto regulation after House passes FIT21?
The US House of Representatives made history Wednesday by passing the Financial Innovation and Technology for the 21st Century Act (FIT21) with a vote of 279 to 136. Republicans led this historic bill, representing the first comprehensive legislation to regulate the crypto market. Speaker Nancy Pelosi and 71 other Democrats supported the bill. Additionally, the importance of the bill was highlighted by Pelosi, who presented it as the foundation for responsible innovation. She also highlighted the need for further improvements to protect consumers and investors.
Implications and provisions
FIT21 seeks to strengthen the Commodity Trading Commission’s role in overseeing crypto markets, particularly those that include digital assets like Bitcoin. Additionally, measures to facilitate secondary market trading are introduced, which contain provisions on stablecoins and anti-money laundering. Although the FIT21 bill passed the House, its future is uncertain in the Senate, which may not be taken up this year. However, advocates hope it will influence the next congressional agenda in January.
Bipartisan perspectives
Patrick McHenry, chairman of the House of Financial Services, who plans to retire in January 2025, stressed his desire to move the bill forward despite his impending retirement. Additionally, McHenry’s efforts reflect recognition of growing bipartisan support for regulatory clarity in the crypto sector.
Meanwhile, Ron Hammond of the Blockchain Association mentioned a significant shift in Congress’ stance on crypto, signaling a potential easing of current regulatory barriers. On the other hand, although the White House has opposed FIT21, it continues to welcome collaboration with Congress on a regulatory framework.
Criticisms and challenges
Not all lawmakers support FIT21. Democrat Maxine Waters criticized the bill, saying it doesn’t give the CFTC enough power and could weaken the agency’s enforcement capabilities. Additionally, SEC Chairman Gary Gensler expressed concerns. He highlighted how FIT21 could undermine current regulatory standards and may fail to protect investors from industrial malpractice.
Read also: FIT21 Act Passed: An Important Milestone for U.S. Digital Asset Regulation
And after?
FIT21’s legislative path appears somewhat difficult, given that it does not have a companion bill in the Senate and there is significant opposition from top Senate Democrats. Investment analysts also predict that this bill is unlikely to become law in Congress.
However, they recognize its crucial role in highlighting major regulatory issues; Lawmakers like Senators Kirsten Gillibrand and Cynthia Lummis continue to push for comprehensive crypto regulation, although their efforts are separate from FIT21. Therefore, with ongoing discussions around stablecoins and market structure, the future of cryptocurrency regulation will likely continue to be the scene of debate and negotiation.
President Joe Biden and former President Donald Trump, the leading candidates in the 2024 elections, will debate June 27 and September 10, where these issues will likely be discussed.
Also see FIT21 bill’s journey through the Senate: What it means for XRP’s decentralized status