- The FIT21 bill aims to overhaul U.S. digital asset regulations, expanding CFTC authority and defining SEC boundaries.
- The bill has bipartisan support and is expected to pass the House, but faces uncertainty in the Senate.
- FIT21 provides a framework for crypto companies to identify regulatory authorities and includes a “5-step test” for decentralized blockchains.
The U.S. House of Representatives is set to vote on a groundbreaking crypto market structure bill, marking a significant step towards overhauling the nation’s digital asset regulatory framework.
The Financial Innovation and Technology for the 21st Century Act, backed by members from both the House Financial Services and House Agriculture Committees, is scheduled for voting on Wednesday afternoon and is anticipated to secure bipartisan support.
The FIT21 bill aims to expand the U.S. Commodity Futures Trading Commission’s (CFTC) authority over the spot market for digital assets classified as commodities, while also establishing new jurisdictional boundaries for the Securities and Exchange Commission (SEC). This legislation would provide crypto companies and digital asset issuers with a clear framework to determine whether their assets are considered securities, thereby identifying their primary regulatory authority.
“FIT21 is a first step to establish a regulatory framework for digital assets – and it must be improved by working with the Senate and the Administration.”
Nancy Pelosi, former Speaker of the House Rep California
Rep. Patrick McHenry (R-N.C.), chair of the Financial Services Committee, expressed his hope for a “substantial vote” in favor of the legislation on Tuesday, aiming to show significant momentum for digital asset legislation. This comes a week after the Senate supported a House resolution overturning SEC accounting guidance.
The bill is anticipated to pass, with several Democrats joining the Republican majority in support. However, its future in the Senate remains uncertain, and the White House announced its opposition to the legislation earlier on Wednesday, although President Joe Biden did not threaten a veto.
The bill has been a focal point of discussion recently. Rep. Jim Himes (D-Conn.), among at least nine Democrat lawmakers supporting the bill, expressed his anticipation to work with colleagues on the Financial Services Committee for ongoing oversight. He views FIT21 as a significant advancement in cryptocurrency regulation and an improvement over current standards. Rep. Ro Khanna (D-Calif.) also confirmed his support just before the Wednesday vote, highlighting the importance of fostering blockchain innovation in the U.S. Rep. French Hill (R-Ark.) noted that the bill introduces a “5-step test” to identify decentralized blockchains and provides a regulatory roadmap.
