- FIT21 garners resounding bipartisan support as it breezes through the House.
- The act is the first major crypto legislation to clear a Congress chamber.
- The crypto bill’s journey continues as it sets sail for the Senate.
Despite strong objections from the SEC and President Biden’s administration, the crypto industry has notched one of its biggest-ever US policy wins after the House of Representatives approved the Financial Innovation and Technology for the 21st Century Act (FIT21), a transformative legislative initiative that defines how regulators and investors approach novel assets like cryptocurrencies.
FIT21 Receives Resounding Bipartisan Support
In a resounding display of bipartisan support, FIT21 sailed through the House with a landslide 279 to 136 votes, marking the first time a major crypto bill has cleared a Congressional chamber.
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The historic moment saw Democrats cross party lines and set aside their differences with Republicans to support the crypto bill. A whopping 71 Democrats and 208 Republicans backed FIT21, compared to three Republicans and 133 Democrats who voted against it.
Former Speaker of the House Rep. Nancy Pelosi emerged as a surprising advocate for the bill, rebelling against the White House’s objections and championing FIT21 as the “first step to establish a regulatory framework for digital assets.”
“Digital currency is already integrated into our economy and will only grow in significance in the years to come…the digital asset industry needs clearer rules of the road, and the federal government needs stronger enforcement authority in order to ensure the responsible development of this emerging technology.” She added.
While the victory on the House floor is cause for celebration, it’s just the beginning of a very long but important journey.
FIT21, Now the Senate’s Problem
The FIT21 act now moves to the US Senate, where its future is much dimmer, particularly because of the chamber’s limited experience with crypto. However, with Republicans increasingly embracing crypto and Democrats joining the fold, there appears to be some hope for the bill’s fate.
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At press time, the Senate comprised 49 Republicans, 48 Democrats, and three independent senators, setting the stage for intense debates.
Once the bill passes the Senate, it will need President Joe Biden’s signature to become law.
FIT21, largely driven by House Republicans, aims to establish a solid regulatory framework for US crypto markets, define what makes a crypto token a security and commodity, and install the CFTC as the primary regulator of digital assets and the watchdog of the non-securities spot markets.
While the bill enjoyed bipartisan support in the House, convincing the Senate and the Biden administration will require considerable effort.
President Biden’s FIT21 Objections
In its latest statement, the White House objected to the FIT21’s passage, asserting that it could affect the US’s regulatory structure for digital assets.
President Biden’s administration argued that the bill, in its current form, lacked “sufficient protections for consumers and investors who engage in certain digital asset transactions,” expressing that it needed more time to work with Congress on digital asset legislation.
However, despite its reservations, the White House shared that it is “eager to work” with Congress to establish a comprehensive and balanced regulatory framework for digital assets based on existing authorities.
On the Flipside
- Earlier in May, the US House of Representatives passed a groundbreaking resolution to overturn the SEC’s crypto accounting guidance. However, President Joe Biden threatened to veto it before they could celebrate.
- SEC Chair Gary Gensler voiced his concerns regarding the FIT21 act, asserting that crypto still fits century-old laws.
Why This Matters
The House approval of FIT21 signals a breakthrough in the long pursuit for clearer regulations in the US crypto industry, a journey plagued by ambiguity for over a decade and a half.
President Biden is eager to work on FIT21:
Biden “Eager to Work” on Crypto Bill Despite Reservations
SEC Chair Gary Gensler, however, isn’t too keen on FIT21:
SEC Chair Slams Crypto Act for Not Conforming to 90-Year Model
