The crypto industry is witnessing a significant moment in history as the U.S. House of Representatives has successfully passed the Financial Innovation and Technology for the 21st Century Act (FIT21). This groundbreaking bill, which has gained support from Republicans, received a bipartisan vote with 279 in favor and 136 against.
As the upcoming presidential election draws closer, there has been a growing interest in cryptocurrency regulation within the political sphere. The FIT21 Act stands as the first of its kind in the nation, aiming to bring much-needed clarity and organization to the crypto market.
A notable display of support for FIT21 came from 71 Democrats, including former House Speaker Nancy Pelosi, who voted in favor of the bill. On the other hand, 133 Democrats opposed it. Among Republicans, only three were against the bill, while 208 supported it.
The main objective of the FIT21 Act is to resolve the ongoing regulatory conflicts between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Republican Representative Patrick McHenry of North Carolina, who co-sponsored the bill, emphasized that it would put an end to the “food fight for control” over crypto regulation. The CFTC, known for its industry-friendly approach, would be granted more jurisdiction.
Despite the Biden administration’s opposition to the bill, it did not threaten to veto it. The administration argued that the bill lacked adequate consumer and investor protections. However, it expressed its willingness to collaborate with Congress in developing a comprehensive regulatory framework.
Democrat Representative Maxine Waters of California criticized FIT21 as a “wish list of big crypto” and deemed it unworthy of support. She cautioned that the bill could create a “regulatory no-man’s land” where both crypto and traditional securities would lack a primary regulator. She also predicted that it could lead to an economic recession.
Similarly, Massachusetts Democrat Stephen Lynch described the bill as a “radical rewrite of the securities laws.” He warned that the volatility in the crypto market could have disastrous consequences for traditional financial markets, ultimately wreaking havoc within the industry.
The crypto industry, represented by the Blockchain Association, expressed its support for FIT21, highlighting the absence of clear regulations as a hindrance to innovation. In a letter addressed to lawmakers in the Senate, they stressed the need for a comprehensive regulatory framework.
Following the successful vote, Kristin Smith, CEO of the Blockchain Association, described the passage of the bill as an endorsement from Congress for the crypto industry in the United States. Last week, several crypto firms, including Coinbase and Kraken, signed a letter organized by the Crypto Council for Innovation, expressing their support for FIT21.
SEC Chair Gary Gensler, known for his strict stance on the industry, raised concerns about the bill, stating that it poses risks to markets and investors. He warned that FIT21 would undermine established oversight of investment contracts, jeopardizing the safety of investors and capital markets.
In conclusion, the passing of the FIT21 Act by the U.S. House of Representatives marks a pivotal moment for the crypto industry. While it has garnered support from Republicans and some Democrats, opposition and concerns about its potential consequences still persist. The bill aims to bring order to the crypto market and resolve regulatory conflicts between the SEC and CFTC. However, it also raises questions about investor protections and the potential impact on traditional financial markets.
