The US House of Representatives voted to approve the Financial Innovation and Technology for the 21st Century Act with very strong support from House Democrats. The Crypto FIT21 crypto market structure bill marks the industry’s most significant legislative achievement in Congress.
The legislation is almost passed
The crypto industry recorded its biggest ever political victory in the US on Wednesday when the House of Representatives approved a wide-ranging bill to establish rules for digital asset markets by a 279–136 vote, with Democrats crossing party lines to support it.
The Crypto FIT21 Financial Innovation and Technology for the 21st Century Bill marks the first time a major cryptocurrency bill has been approved by either chamber of Congress. The issue is now before the US Senate, where its future is much murkier because there is no similar bill and nothing for government officials to lean on.
The US has lagged behind other global jurisdictions in setting cryptocurrency regulations, and despite Wednesday’s victory, the implementation of such oversight is far from complete.
“We need rules of the road,” said Rep. Josh Gottheimer, one of the Democrats who bucked the opposition of the White House and the ranking Democrat on the House Financial Services Committee, Rep. Maxine Waters (D-Calif.). He called it “well-reasoned, thoughtful, bipartisan legislation” and argued before the vote that “it’s fit to become law if we work together.”
Overall, 71 Democrats and 208 Republicans voted in favor of the bill, with 3 Republicans and 133 Democrats voting against it.
Biden and Gensler oppose the act
President Joe Biden opposed the bill with a statement, though he did not say he would veto the bill, as he did recently when Congress attempted to override an effort by the Securities and Exchange Commission (SEC) to establish an accounting policy for cryptocurrencies. SEC Chairman Gary Gensler also came out strongly against it in a lengthy public statement, arguing that the Crypto FIT21 bill is unnecessary and jeopardizes existing securities regulations. (Who would have any doubt?)
The legislation, largely drafted by House Republicans, would establish a regulatory regime for US cryptocurrency markets, establish consumer protections, designate the Commodity Futures Trading Commission (CFTC) as the lead regulator of digital assets and supervisor of non-securities spot markets, and more clearly define what makes a cryptocurrency token a security or a commodity.
Some argue that the bill is aimed at allowing cryptocurrency companies that have evaded securities laws to avoid liability.
“They’ve already made billions of dollars by illegally issuing or facilitating the purchase and sale of cryptocurrency securities. And Republicans are now proposing to reward those illegal actions by making them legal.”
