Uncertain Future for FIT21 Bill Awaiting Senate Approval, Clarifying US Regulatory Roles in Crypto
Summary:
The Financial Innovation and Technology for the 21st Century Act (FIT21), which redefines the roles of U.S. securities and commodities regulators in overseeing the crypto sector, faces an uncertain future as it moves towards the Senate and possibly President Biden's desk. If approved by the Senate, it will return to the House for final consent before landing on the President's desk, who can either sign or veto the bill. Though FIT21 has faced both opposition and support, the bill primarily grants more control over crypto to the Commodity Futures Trading Commission, a regulator perceived as more lenient than its counterpart.
The future of a bill clear-cutting the roles of U.S. securities and commodities regulators in governing the crypto sector remains uncertain as it advances to the Senate, then possibly to the desk of President Joe Biden. The Financial Innovation and Technology for the 21st Century Act (FIT21), also recognized as H.R. 4763, earned approval from the House on May 22 with the support of 71 Democrats and 208 Republicans, opposing 136 naysayers. However, its fate in the Senate is unpredictable without an accompanying bill and is potentially facing opposition from crypto-skeptic, Elizabeth Warren. Interestingly, the Senate had earlier passed a resolution to neutralize a rule that hampers banks and crypto companies from transacting.
There might, however, be a lengthy period before the 100-member Senate takes up FIT21, given that there's no deadline for its deliberation. And even when they do, potential committee reviews, discussions, and revisions are anticipated. For the bill to progress, a minimum of 51 senators need to vote in its favor. Elements of FIT21 could be modified, with House and Senate members working together to resolve differences.
The bill will then circulate through the House and Senate for final consent. Within a 10-day window, President Biden can either provide endorsement or exercise veto power. Despite his administration's opposition to the bill, there's no confirmation that he'll veto it. In case of a veto, a two-thirds majority vote from the House and Senate has the capacity to countermand his decision.
SEC Chair Gary Gensler expressed his opposition to FIT21, warning that it could undermine financial market stability by creating "new regulatory gaps." Meanwhile, many perceive its House approval as a preliminary triumph for the crypto sector. Coinbase CEO Brian Armstrong hails the bill's passage and Democrat support as a significant breakthrough towards well-defined crypto regulations.
Despite the broad reception, Gabriel Shapiro, a crypto-centric lawyer, warned that FIT21 might still confer considerable power to the SEC. He further explained how the bill suggests a dual regulatory framework shared by the SEC and CFTC, providing the CFTC with unprecedented regulatory authority over the spot commodities market.
Primarily, FIT21 grants the Commodity Futures Trading Commission more control over crypto, a regulator seen as more lenient compared to its securities counterpart. Nevertheless, the SEC will regulate cryptos lacking adequate decentralization, but FIT21 may also allow cryptos categorized as securities to be marketed as commodities.
Published At
5/23/2024 4:43:15 AM
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