The U.S. House of Representatives took a major step towards regulating the cryptocurrency industry with the passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) on May 22.
The bill, championed by Republicans, aims to establish a regulatory framework for digital assets, addressing key areas like consumer protection, regulatory oversight, and asset classification.
Key Provisions of FIT21
- Consumer Protection: The bill mandates transparency and accountability from digital asset developers and institutions like exchanges and brokers. This includes requiring accurate disclosures about projects and operations.
- Regulatory Oversight: The act proposes the Commodity Futures Trading Commission (CFTC) as the primary regulator for non-security crypto spot markets. It also clarifies how different digital assets are classified as securities or commodities, potentially shifting oversight away from the Securities and Exchange Commission (SEC) for certain assets.
Mixed Reactions
While the crypto industry celebrated the bipartisan support for the bill, with 71 Democrats joining Republicans in its favor, regulators and some lawmakers voiced concerns. The White House and SEC Chair Gary Gensler expressed fear of regulatory gaps and potential erosion of investor protections.
Future Outlook
FIT21 now faces an uphill battle in the Senate. Despite broad support in the House, the bill needs to navigate potential opposition and revisions before becoming law. This move by the House signifies a growing push for crypto regulation in the U.S., but the final framework remains to be determined.
