U.S. House Passes FIT21 Act, Aiming for Clearer Digital Asset Regulation
Summary:
The U.S. House of Representatives has passed the Financial Innovation and Technology for the 21st Century (FIT21) Act, aimed at providing regulatory clarity for digital assets. The bill, after approval from the Senate and the president, would define the roles of SEC and CFTC over digital currencies. However, there is opposition, with arguments suggesting the potential for deregulation may lead to a market crash. The House remains to discuss the Central Bank Digital Currency (CBDC) Anti-Surveillance State Act, which aims to prohibit the Federal Reserve from issuing a digital dollar.
A clear majority of the U.S. House of Representatives endorsed a piece of legislation aimed at bringing regulated transparency over digital currencies. The bill, referred to as the Financial Innovation and Technology for the 21st Century (FIT21) Act or H.R.4763, was passed by a vote count of 279 to 136 on May 22. If the Senate also approves and if it subsequently receives the Presidential signature, the legislation will define the purview of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) as it pertains to digital currencies. This bill received bipartisan approval with 71 Democrats and 208 Republicans in favor.
According to Representative Patrick McHenry, a lack of clear regulation is currently stifling the full potential of innovation within the digital currency space. He said, prior to the vote, that the SEC and CFTC appeared to be vying for control over these types of assets. However, Representative Maxine Waters expressed intentions to vote against, arguing that the FIT21 act could potentially land cryptocurrencies in a "regulatory wilderness," and would further allow conventional financial institutions to function without SEC regulation.
She voiced concerns that this could trigger detrimental consequences, warning that this could be "the most damaging, and potentially risky proposal I have seen in a while." In her opinion, this legislation could lead to deregulating both crypto and some traditional securities to a degree which could cause a potential market collapse and recession. On a related note, the House still intends to deliberate and vote on H.R. 5403, the Central Bank Digital Currency (CBDC) Anti-Surveillance State Act, which prohibits the Federal Reserve from releasing a digitized dollar through middlemen.
On May 21, the leadership of the Democratic Party reportedly expressed disinterest in supporting the anti-CBDC bill and the FIT21 bill, but it will not actively oppose the legislation. As the U.S. delves deeper into an election year, with digital currencies becoming increasingly valuable to voters, these issues surrounding crypto-related legislation and the pending SEC decision on an Ether (ETH) exchange-traded fund reach critical prominence. The anticipated front-runners for the 2024 Presidential race, current President Joe Biden and former President Donald Trump, have agreed on June 27 and Sept. 10 as the dates for their public debates.
Published At
5/23/2024 12:50:06 AM
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