The U.S. House of representatives approves FIT21 Crypto Bill with 279-136 votes, with 71 democrats voting in favour.
TakeAway Points:
- The crypto industry celebrated a major legislative victory when the U.S. House of Representatives passed the FIT21 bill by a vote of 279-136.
- With the CFTC as the principal regulator and cryptocurrency tokens classified as commodities or securities, the measure attempts to regulate digital assets.
- The Senate’s future is still unclear because of a lack of companion legislation and committee action, even with bipartisan support in the House.
Historic Vote on Crypto Law
The Financial Innovation and Technology for the 21st Century Act (FIT21), the first significant cryptocurrency law to pass one of the chambers of Congress, was approved by the U.S. House of Representatives on Wednesday in a historic vote.
With 71 Democrats and 208 Republicans voting in favour, the law passed with a 279-136 majority, demonstrating bipartisan support. With the establishment of new jurisdictional boundaries for the Securities and Exchange Commission (SEC) and increased authority for the Commodity Futures Trading Commission (CFTC) over digital assets classified as commodities, this historic milestone seeks to transform the regulatory environment for digital assets in the United States.
Rep. Patrick McHenry (R-N.C.), the Financial Services Committee chair, voiced hope that the bill would succeed, saying he expected “a strong vote” to show support for legislation pertaining to digital assets. Since there is not a companion bill and the White House has voiced opposition without threatening a veto, the bill’s future in the Senate is still uncertain.
Crucial Items and Assistance
The principal regulator for cryptocurrency enterprises is made clear by FIT21, which offers a framework for evaluating whether digital assets qualify as securities. Representative French Hill (R-Ark.) emphasised the bill’s regulatory oversight pathway and its “5-step test on whether anything is a decentralised blockchain or not.” The bill also includes measures to increase standards for custody, impose capital requirements on intermediaries, and reduce conflicts of interest.
Democrats who back the bill include Reps. Jim Himes (D-Conn.) and Ro Khanna (D-Calif.). While Khanna underlined the necessity of blockchain innovation in America, Himes referred to FIT21 as “an crucial step forward in the regulation of the cryptocurrency business.”
The Blockchain Association, Circle, ConsenSys, and Kraken are among the industry organisations that have endorsed the bill. They contend that the lack of clear regulations creates confusion in the market and exposes consumers to risk.
Disapproval and Fears
The bill is opposed, even though it is supported. The ranking member of the House Financial Services Committee, Rep. Maxine Waters (D-Calif.), compared the plan to the Commodity Futures Modernization Act, which she believes played a role in the 2008 financial crisis, calling it “the worst, most damaging deregulatory proposal” she has ever seen.
According to Waters, FIT21 leaves open the possibility of regulatory gaps since it sunsets disclosure obligations after 180 days, so depriving the CFTC of adequate ability to combat fraud.
The AFL-CIO, Americans for Financial Reform, and other academics, along with a coalition of unions and consumer protection organisations, issued a letter to House leaders pleading with them to vote against the bill. They contended that the bill’s interpretation of “investment contract assets” might make it possible for conventional securities and cryptocurrencies to escape strict regulation.
The bill was also opposed by SEC Chair Gary Gensler, who claimed it would “create new regulatory gaps and contradict decades of precedent,” possibly giving criminals an escape from securities rules.
