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US House Gives Green Light to Crypto Bill FIT21, Now Moves to Senate

3 mins
Updated by Harsh Notariya
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In Brief

  • The US House passes FIT21 bill, setting crypto regulatory framework.
  • The vote saw bipartisan support, with 279 for and 136 against.
  • Next, the bill moves to the Senate, facing an uncertain future.
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On Wednesday, the crypto industry achieved a historic milestone as the US House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21).

The bill, which aims to establish a comprehensive regulatory framework for digital assets, was approved with bipartisan support in a 279-136 vote. This marks a significant step towards legal clarity in the crypto space.

FIT21 Gets Strong Support from Lawmakers and Industry Leaders

With 71 Democrats joining 208 Republicans in favor, the passage signals a growing consensus on the need for clear crypto regulations. Introduced in July 2023, the bill aims to define the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in overseeing cryptocurrencies. It also establishes guidelines for various aspects of the crypto market, including token issuance, trading, and custody.

Several legislators have expressed their strong support for the bill’s passage. Congressman John Rose highlighted the need to move away from regulation by enforcement.

“I’ve had enough of Biden Administration officials regulating by enforcement. That’s why I support FIT21, legislation that will prevent the government from standing in the way of digital innovation. The bill includes critical guardrails that will protect consumers and foster innovation,” Congressman Rose said.

Additionally, Representative Wiley Nickel stressed the importance of establishing a modern regulatory framework that acknowledges the unique nature of digital assets.

“FIT21 provides a clear regulatory framework for digital assets instead of relying on 90-year-old securities law written before the Internet existed. That’s a big deal. Whether you love or hate crypto, you should support regulation,” Representative Nickel stated.

Read more: Crypto Regulation: What Are the Benefits and Drawbacks?

Industry leaders echoed this enthusiasm. Brad Garlinghouse, CEO of Ripple, praised the bipartisan support for FIT21 and criticized the SEC’s approach to crypto regulation.

“Today, more than ever, we are seeing what a political liability Gensler has been to the Biden administration. It’s the reason we saw 71 Democrats cross the aisle and support FIT21. We are just getting started!” Garlinghouse wrote on his X (Twitter) account.

Jake Chervinsky, Chief Legal Officer at Variant, also shared his perspectives regarding the bill’s passage. He sees it as a vote of no confidence in the SEC’s current stance on crypto.

“House Democrats voting in favor of this bill: 71. That is a huge number of elected Democrats voting ‘no confidence’ in the current SEC, and sending a message to the Biden administration that ‘anti-crypto’ is a losing platform this year,” he said.

Nischal Shetty, co-founder of Shardeum, believes the passage of FIT21 has broader implications for the Web3 ecosystem. According to Shetty, the regulatory clarity provided by the FIT21 Act could encourage wider cryptocurrency adoption and an expansion of the Web3 industry.

“With the clarity and support provided by initiatives like FIT21, we can expect a significant boost in adoption, which will naturally lead to better tax laws and regulatory frameworks,” Shetty told BeInCrypto.

Despite the significant progress in the House, FIT21 faces an uncertain future in the Senate. A counterpart bill is currently absent.

Moreover, the necessary committees have yet to engage in the same level of work on crypto. This makes the path forward less certain.

Yet, the White House has expressed its opposition to the bill, citing concerns about consumer and investor protections. The administration acknowledges the need for a regulatory framework for digital assets. However, they believe FIT21 requires additional safeguards in its current form.

“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 White House wrote.

However, President Joe Biden’s statement did not mention a veto threat. This contrasts with his stance on another crypto-related bill, Staff Accounting Bulletin 121 (SAB 121).

BeInCrypto previously reported that SEC Chair Gary Gensler also voiced strong opposition to the bill before the House vote. He argued that it weakens SEC oversight and warned that it could increase investor risks and harm US markets.

Read more: How Does Regulation Impact Crypto Marketing? A Complete Guide

Despite the opposition, the passage marks a pivotal moment in the ongoing effort to provide clear regulations for the crypto industry in the US. With the FIT21 Act now in the Senate’s hands, the industry is watching closely to see if it will become law. Nevertheless, this development will potentially transform the regulatory environment for digital assets in the United States.

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Lynn Wang
Lynn Wang is a seasoned journalist and content creator with over eight years of experience in digital marketing and cryptocurrency journalism. Her expertise lies in SEO strategy, blockchain technology, and Web3, where she has consistently delivered impactful content initiatives and engaged audiences effectively. Since January 2022, Lynn has been at the forefront of content and community efforts for BeInCrypto Indonesia. Under her leadership, the platform has witnessed remarkable growth,...