Crypto Bill Faces Uphill Battle for Passage in 2024, Say Lawmakers
On Wednesday, May 22, the U.S. House of Representatives approved a bill aimed at providing consumer protections and regulatory certainty for digital assets. The Financial Innovation and Technology for the 21st Century (FIT21) Act (H.R. 4763) was passed with significant bipartisan support, according to a press release from the House Financial Services Committee (HFSC).
The bill was approved by a vote of 279 to 136, with 208 Republicans and 71 Democrats supporting it, as detailed on the Clerk of the House’s website.
“FIT21 provides the regulatory clarity and robust consumer protections necessary for the digital asset ecosystem to thrive in the United States,” said HFSC Chairman Patrick McHenry in the press release. He added, “The bill also ensures America leads the financial system of the future and remains a hub for technological innovation.”
The legislation assigns new jurisdiction over digital commodities to the Commodity Futures Trading Commission (CFTC), clarifies the Securities and Exchange Commission’s (SEC) authority over digital assets linked to investment contracts, establishes a framework for secondary market trading of specific digital commodities, and mandates consumer protection measures for entities registered with either the CFTC or the SEC, as stated in the release.
These provisions are designed to protect consumers by enforcing transparency and accountability for digital asset developers and customer-facing institutions. The legislation also seeks to safeguard digital asset projects by outlining a clear process for fundraising and determining which transactions fall under specific regulatory bodies. Additionally, it aims to support institutions serving digital asset customers by clarifying jurisdiction and creating registration protocols that enable them to operate in these markets.
“The overwhelming support for FIT21 in the House should serve as a wakeup call to the Senate and this administration,” McHenry emphasized in the release. “They must come to the table to ensure the Americans who engage with digital assets can do so safely.”
This landmark legislation could provide the cryptocurrency industry with the regulatory clarity it has long sought from Washington, as reported by PYMNTS in July when the bill was initially introduced.
However, shortly before the vote, SEC Chair Gary Gensler expressed concerns that the cryptocurrency legislation could undermine his agency’s work.
In a statement released on Wednesday, Gensler noted that FIT21 would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk.
Meanwhile, cryptocurrency exchange Coinbase welcomed the bill’s passage.
“This Act will protect consumers and foster innovation & job creation by providing clear rules for crypto,” Coinbase stated in a post on X (formerly Twitter) on Wednesday. “And while this is just step 1 in turning the Act into law, let’s celebrate this historic win.”
