US House of Representatives passed the Act on Financial Innovations and Technologies for the 21st Century (FIT21) by an overwhelming majority of 279 to 136 votes. Seen as a large win for the crypto industry, the bill aims to establish a long-awaited regulatory framework for digital assets in the US.
FIT21: Bipartisan support, but obstacles remain
FIT21 received a boost from an unlikely source – former House Speaker Nancy Pelosi. In a move contrary to expectations, Pelosi defended the bill, calling it a “first step” toward regulating the burgeoning crypto space. This bipartisan support, with 71 Democrats joining forces with 208 Republicans, marks a historic moment for the industry.
However, the champagne corks will likely remain open for now. The bill faces a much tougher challenge in the Senate, where cryptocurrency regulation remains uncharted territory. While the House’s recent shift toward cryptocurrency friendliness may provide some hope, the Senate and Biden administration will be convinced uphill battle.
Regulators cautious, president threatens veto
Both the SEC and the White House have expressed concerns about FIT21. The SEC, led by Chairman Gary Gensler, believes the current bill lacks sufficient consumer protections and argues that existing regulations could be applied to cryptocurrencies. The White House, echoing these concerns, called for a more comprehensive approach and framework built on “existing authorities.” President Biden has even threatened to veto the bill in its current form.
As of today, the market cap of cryptocurrencies stood at $2.5 trillion. Chart: TradingView.com
The fight for transparency: cryptocurrencies vs. Ordinance
The passage of FIT21 marks a turning point in the ongoing saga of US crypto regulation. For over a decade, the industry has operated in a gray zone, hindering innovation and investor confidence. FIT21 supporters believe the bill will provide much-needed transparency, allowing businesses to operate with greater certainty.
However, regulators remain cautious. Their primary concern is to protect consumers from the inherent risks associated with them cryptocurrencies, such as volatility and potential fraud. They also argue that a more strong regulatory framework is needed to prevent money laundering and other illegal activities.
The road ahead: compromise or impasse?
The future of FIT21 remains uncertain. The Senate could significantly amend the bill, potentially introducing more stringent consumer protection measures or even withdrawing it altogether. Negotiations between lawmakers, regulators and the White House will be key to determining the final shape of cryptocurrency regulation in the US.
The fight for a clear regulatory path for cryptocurrencies is not over yet. With both sides holding sturdy views, the coming months could be a period of intense debate and compromise, or potentially stalemate. Given the potential of cryptocurrencies to transform the financial landscape, the outcome of this battle will have significant consequences for investors, businesses and the future of money itself.
Featured image from The Hill, chart from TradingView
