Tech
The controversial FIT21 cryptocurrency bill passes the House
The U.S. House of Representatives passed the cryptocurrency regulation Financial Innovation and Technology for the 21st Century Act (FIT21) on Wednesday. This marks the first time comprehensive cryptocurrency legislation has been voted on in the full House.
Second data released by Congressthe Republican-led bill passed by a vote of 279 to 136, garnering support from 71 Democrats including former House Speaker Nancy Pelosi.
FIT21 aims to establish a regulatory framework for digital assets, granting greater authority and funding to the Commodity Futures Trading Commission (CFTC) to oversee spot markets for cryptocurrencies and “digital commodities,” with a particular focus on Bitcoin (BTC). The bill creates a process for secondary market trading of digital commodities initially offered as investment contracts and includes provisions for stablecoins and anti-money laundering measures.
While the bill is unlikely to pass the Senate this year, it sets the stage for the next Congress in January. President of the Chamber for Financial Services Patrick McHenry said:
FIT21 provides the regulatory clarity and robust consumer protections needed for the digital asset ecosystem to thrive in the United States. The bill also ensures that America leads the financial system of the future and remains a hub for technological innovation.
A widely debated bill
However, the bill has been criticized by some lawmakers and regulators. Democrat Maxine Waters, House Financial Services Committee, called FIT21 one of the worst bills she has ever seen, arguing that it would strain the CFTC’s resources and weaken its enforcement. Chairman of the SEC Gary Gensler also criticized the billarguing that it would create regulatory loopholes and discard the Howey Test, a long-standing legal precedent for determining whether an asset qualifies as a security.
Looking ahead, the Senate does not currently have a companion bill for FIT21, and key lawmakers in the Democratic-controlled chamber have not shown interest in or opposed the legislation in the past. Senators Kirsten Gillibrand and Cynthia Lummis has introduced its own comprehensive cryptocurrency regulation bill in June 2022, the Responsible Financial Innovation Act, but has yet to gain traction on Capitol Hill.
Cryptocurrency regulation is becoming an increasingly partisan issue, with Republicans showing significantly more favorable views towards supporters of digital assets. Donald Trump, the Republican candidate for president of the United States, said this in front of a gathering of supporters supports cryptocurrency and his campaign would accept donations from it.