Tech
Cryptocurrency Regulation Bill Passes House, Moves to Senate
The U.S. House of Representatives passed a cryptocurrency market structure bill Wednesday night, which aims to regulate the industry as a whole.
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The bill, “The Financial Innovation and Technology for the 21st Century Act” (FIT21), would effectively classify cryptocurrency as a commodity, not a security, and therefore exempt from securities regulations. It would also establish the oversight of cryptocurrencies, whether they should be regulated by the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).
The Republican-led bill, the first standalone legislation of its magnitude, passed the lower chamber by a vote of 279 to 136, gaining the support of 71 Democrats, including former House Speaker Nancy Pelosi of California.
Cryptocurrency bill wins approval from US House of Representatives despite criticism from SEC chairman Gary Gensler, who has publicly expressed his opposition Now.
Gensler declared“FIT21 would create new regulatory gaps and undermine decades of precedent in the oversight of investment contracts, exposing investors and capital markets to immeasurable risk.” He reiterated his position on cryptocurrency as a security, expressing concern that the bill would exclude investment contracts recorded via blockchain from the statutory definition of a security and, therefore, from the protections of the federal securities laws.
Yesterday, hours before the vote, the White House also expressed opposition to the bill, citing concerns over inadequate investor protections. President Biden released a declaration claiming to be against the law, but did not threaten to veto it.
What’s next?
The bill must now win approval from the Senate, but that will be a tall order since key figures in the Democratic-controlled Senate have shown little interest in it.
The bill is unlikely to become law in Congress, but it may shed light on how Democrats and Republicans think about cryptocurrency regulation.
In an election year where cryptocurrencies have become a political issue, with the Presumptive Republican presidential candidate Donald Trump accepts cryptocurrency donations and Democrats take a softer stance on cryptocurrencies: The reactions of both political parties are important.