Bullish: House Backs Fit21 Bill with Robust Majority, Signaling Confidence in Crypto’s Future

May 22, 2024

The U.S. House of Representatives, in a landmark decision that underscores the growing acceptance of digital currencies, has passed the eagerly awaited Fit21 Crypto Bill with a robust bipartisan majority of 279 to 136.

This decisive move not only marks a significant milestone for the cryptocurrency industry but also signals a bullish outlook for the future of decentralized finance. 

The bill’s passage is seen as a vote of confidence from lawmakers, reflecting a shared vision of fostering innovation and stability in the growing crypto market.

Historic Achievement: FIT21

The Financial Innovation and Technology for the 21st Century Act (FIT21) marks a historic achievement as the first significant cryptocurrency bill to pass one chamber of Congress. It paves the way for cryptocurrencies to bypass many securities regulations, provided they achieve adequate decentralization and meet other specified criteria.

The legislation, largely driven by House Republicans, aims to regulate the U.S. cryptocurrency markets. It sets consumer protections, appoints the Commodity Futures Trading Commission (CFTC) as the primary regulator of digital assets and overseer of non-securities spot markets, and clarifies the distinction between crypto tokens as securities or commodities.

This new framework diverges from the Securities and Exchange Commission’s (SEC) current regulatory approach, potentially placing a significant portion of the cryptocurrency industry outside the SEC’s regulatory scope. 

Overall, the bill garnered support from 71 Democrats and 208 Republicans, while facing opposition from 3 Republicans and 133 Democrats.

Bipartisan Support Highlighted

Senator Cynthia Lummis (R-Wyo.) celebrated the passage of FIT 21, highlighting the strong bipartisan support for establishing a regulatory framework for the cryptocurrency industry. “The passage of FIT 21 proves there is strong, bipartisan support in Congress for creating a regulatory framework for the crypto industry. Congratulations Patrick McHenry, Congressman GT, Rep French Hill, Rep Dusty Johnson, GOP Majority Whip & Warren Davidson on this momentous vote,” the pro-crypto and self-proclaimed “Bitcoiner” said in an X post.

Administration’s Statement and Concerns

On Wednesday morning, the Biden administration released a statement opposing the passage of H.R. 4763, which aims to alter the regulatory structure for digital assets in the United States. The administration emphasized the need for a comprehensive and balanced regulatory framework, stating, “The administration is eager to work with Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, which will promote the responsible development of digital assets and payment innovation and help reinforce United States’ leadership in the global financial system.”

The administration also expressed concerns that “H.R. 4763 in its current form lacks sufficient protections for consumers and investors who engage in certain digital asset transactions.”

The statement concluded with a commitment to continued collaboration with Congress, noting, “The Administration looks forward to continued collaboration with Congress on developing legislation for digital assets that includes adequate guardrails for consumers and investors while creating the conditions needed for innovation, and further time will be needed for such collaboration.”

The government’s position on H.R. 4763 received support from SEC Chair Gary Gensler who said that FIT 21 “would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk.”

The Crypto Council for Innovation, a global alliance of industry leaders dedicated to unlocking the promise of crypto, described the passage of FIT 21 in Congress as “a defining moment.” The CCI noted that the bill marks “years of incredible effort on both sides of the aisle to establish a comprehensive federal framework for digital assets.”

The digital assets industry has been advocating for a comprehensive federal regulatory framework that promotes responsible innovation and safeguards consumers and investors. According to the Crypto Council for Innovation, “The digital assets industry has long been calling for a comprehensive federal regulatory framework to allow for responsible innovation while protecting consumers and investors – FIT 21 does exactly that.”

It emphasized that “FIT 21 is about investor protection, preventing market manipulation, allowing for much-needed regulatory clarity, fostering financial inclusion, protecting national security, and much more.”

What’s Next?

While the cryptocurrency industry celebrates this huge win, FIT 21’s fate in the U.S. Senate remains uncertain due to the lack of a companion bill. Support in the Senate is unclear, and the necessary committees have not yet dedicated the same effort to cryptocurrency issues.

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