As a seasoned crypto investor with a keen interest in regulatory developments, I view the passing of the Financial Innovation and Technology for the 21st Century Act (FIT21) as a historic step towards clear-cut regulation for digital assets. The near unanimous support from both Republicans and Democrats is a testament to the growing recognition of the importance of this industry in our economy.
On Monday, the U.S. House of Representatives approved a bill providing clear legal guidelines for the classification, registration, and custody of crypto assets.
The Financial Innovation and Technology for the 21st Century Act (FIT21) bill gained almost unanimous approval among Republicans, along with the support of 71 Democrats. This led to a final vote count of 279 in favor and 136 against.
A ‘Historic’ Step For Crypto Regulation
Industry heads in the crypto sphere lauded the law as a commendable initiation, bringing clarity and suitability to regulations governing the exchange and recording of digital assets.
Before the recent vote, I, Brian Armostrang, CEO of Coinbase, expressed Americans’ desire for their representatives to safeguard their right to use crypto, establish transparent regulations for consumer protection, and prevent ambiguity from being exploited by certain administration figures attempting to illegally eliminate this industry.
One of the bill’s writers, French Hill (R-AR), explained that the legislation introduces an interim supervision mechanism for digital asset companies. They can submit a “notice of intent to register” to federal regulators as the authorities determine their jurisdictional roles in overseeing the industry.
“This legislation introduces rigorous consumer safeguards, forbidding the mixing of client funds,” remarked Hill. He emphasized that this measure could help avoid future collapses akin to FTX’s.
This point additionally aids in distinguishing which types of digital assets fall under the regulatory purview of the Securities and Exchange Commission (SEC) or the Commodities and Futures Trading Commission (CFTC). For decades, these agencies have debated over their respective jurisdictions within this sector.
What Democrats Think Of FIT21
Democrats on the House Financial Services Committee expressed opposing views to their Republican colleagues, arguing that the bill would favor “unregistered cryptocurrency companies of significant means” at the expense of “common investors seeking to amass wealth.”
SEC Chairman Gary Gensler expressed his disagreement with the bill, asserting that existing laws are adequate for regulating crypto assets. He believed that the industry’s unwillingness to adhere to these regulations should not be prioritized over safeguarding investors. In simpler terms, he advocated for enforcing current rules instead of creating new ones to accommodate non-compliant firms in the crypto sector.
A substantial number of Democrats endorsed the legislation. They encouraged their fellow party members to follow suit, emphasizing the importance of staying competitive with other countries in crypto regulation and advancement. According to Representative Yadira Caraveo (D-CO), “This isn’t a flawless bill, but I think it’s a positive move forward.”
Before the vote on FIT21, the Biden administration expressed its opposition, but also signaled its intent to collaborate with Congress in establishing a comprehensive and well-balanced regulatory structure for digital assets.
From my perspective as an analyst, the administration hasn’t indicated their intention to veto this new bill if it makes it through both houses of Congress, unlike their past actions regarding cryptocurrency banking regulations. Similar to FIT21, this legislation gained bipartisan support and passed in the House.
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2024-05-23 01:13