It is a historical moment for the crypto industry. The U.S. House of Representatives has passed the Financial Innovation and Technology for the 21st Century Act (FIT21). The bill, championed by Republicans, received a bipartisan vote of 279 in favor and 136 against.
Also Read: White House Will Not Veto FIT21
As the presidential election approaches, there has been an increasing political interest in cryptocurrency regulation. The FIT21 Act is the first of its kind in the nation, and it is a huge effort to bring clarity and order to the crypto market.
Republicans Showed More Support for FIT21
In a notable show of support, 71 Democrats, including former House Speaker Nancy Pelosi, voted in favor of the bill. Meanwhile, 133 Democrats opposed it. Among Republicans, only three opposed, while 208 supported it.
The FIT21 Act seeks to end the regulatory tug-of-war between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Republican Rep. Patrick McHenry of North Carolina, co-sponsor, stated that the bill would end the “food fight for control” of crypto regulation. The CFTC, seen as more industry-friendly, would gain more jurisdiction.
There Have Been Opposition and Concerns
Despite the Biden administration’s opposition to the bill, it did not threaten an overrule. The administration argued that the bill lacked sufficient consumer and investor protections. However, it was willing to work with Congress to develop a comprehensive regulatory framework.
Democrat Rep. Maxine Waters of California labeled FIT21 a “wish list of big crypto” and undeserving of support. She warned that the bill could move crypto and traditional securities into a “regulatory no-man’s land” with no primary regulator. She has also predicted that it could cause a recession.
Also Read: Donald Trump Will Build a Crypto Army To Fight Joe Biden
Meanwhile, Massachusetts Democrat Stephen Lynch called the bill a “radical rewrite of the securities laws.” She predicted that volatility in the crypto market could lead to disaster in traditional financial markets, eventually “causing havoc in our financial markets.”
The Industry Supports FIT21
The Blockchain Association, representing the industry, highlighted the absence of clear rules as a barrier to innovation. In a letter to lawmakers in the Senate, they stated:
The absence of clear rules leads to confusion in the marketplace for companies, and leaves users and consumers unprotected.
After the vote, Blockchain Association CEO Kristin Smith described the bill’s passage as a badge of Congressional validation for the crypto industry in the United States. Last week, dozens of crypto firms, including Coinbase and Kraken, signed a letter organized by the Crypto Council for Innovation supporting FIT21.
SEC Chair Gary Gensler, known for his tough stance on the industry, warned that the bill poses a risk to markets and investors. He said FIT21 would “undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk.”
Cryptopolitan reporting by Jai Hamid
