US House Passes FIT21 Crypto Bill with Broad Bipartisan Support

The U.S. House of Representatives has shown bipartisan approval for a bill aimed at providing clearer regulation of digital assets. The bill, known as the Financial Innovation and Technology for the 21st Century (FIT21) Act, passed with a vote of 279 to 136 on May 22.

This legislation, officially titled H.R.4763, seeks to define the regulatory responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) concerning digital assets. A significant bipartisan coalition supported the bill, with 71 Democrats and 208 Republicans voting in favor.

Representative Patrick McHenry advocated for the bill by criticizing the current regulatory framework. “Our regulatory structure is stifling the full potential of digital asset innovations,” McHenry stated. “There’s a regulatory turf war between the SEC and the CFTC over the control of these assets.”

Conversely, Representative Maxine Waters voiced strong opposition. She argued that the FIT21 Act would place cryptocurrencies in a “regulatory no man’s land,” potentially enabling traditional financial entities to evade SEC oversight. “This legislation could be one of the most damaging I’ve seen, potentially deregulating crypto and certain traditional securities to a dangerous extent,” Waters remarked, expressing concerns about possible market destabilization and economic repercussions.

Additionally, the House is scheduled to debate and vote on H.R. 5403, the Central Bank Digital Currency (CBDC) Anti-Surveillance State Act, which aims to prevent the Federal Reserve from issuing a digital dollar via intermediaries. Despite Democratic leadership expressing disapproval of both the anti-CBDC bill and the FIT21 bill, they have decided not to formally oppose the legislation.

These legislative moves occur as the U.S. enters an election year with digital assets increasingly becoming a topic of voter interest. Both President Joe Biden and former President Donald Trump, who are expected to be their parties’ candidates in 2024, have agreed to participate in debates on June 27 and September 10.