- The US House passed the FIT21 Act to set regulatory clarity for crypto.
- Next on the line is the US CBDC bill and how the US Senate handles both.
US crypto regulation has recorded significant progress as digital assets became a political and contentious issue ahead of the US elections.
After the successful repeal of SEC’s Staff Accounting Bulletin 121 (SAB 121) on 16th May, more progress on crypto regulation has been made this week.
On 22nd May, the US House of Representatives voted and passed the Financial Innovation and Technology for the 21st Century Act, known as the FIT21 Act. Despite President Joe Biden’s opposition to the FIT21 crypto bill, it passed with bipartisan support.
FIT21 crypto bill
The FIT21 bill aims to establish a regulatory framework for digital assets in the US. Notably, the bill seeks to offer the bulk of the crypto oversight to CTFC (Commodity Futures Trading Commission), an entity viewed as less hostile to the industry compared to the SEC.
However, the SEC will retain authority on digital assets that fall within the ‘security’ definition. Coinbase founder Brian Armstrong called the FIT21 Act update a ‘historic vote’ for crypto regulation and clarity if passed into law.
“Historic vote today on the FIT21 bill in the House of Representatives, that will finally start to create some clear rules to regulate crypto”
The Blockchain Association, for its part, referred to the development as a ‘watershed moment’ for the crypto industry.
Interestingly, the update also prompted the White House’s reaction. The administration registered its opposition to the FIT21 Act but maintained its willingness to work for a ‘balanced’ regulatory framework for digital assets.
Reacting to the White House’s statement, Bloomberg ETF analyst James Seyffart called it a ‘lip service.’
“What are the odds that this is just lip service? I guess time will tell”
The next step for the Republican-sponsored FIT21 Act will be the Senate. However, market watchers believe that the progress could pause until the next congress picks it up in January 2025.
After FIT21 Act, House to vote on US CBDC
The US House of Representatives will now vote on another crypto bill, the CBDC Anti-Surveillance State Act, HR 5043, this week. The bill seeks to bar the Federal Reserve from issuing CBDC (Central Bank Digital Currency), also known as a digital dollar, or using it as a monetary policy tool.
The bill was introduced by Tom Emmer, the Republican House Majority whip, who maintained that the US CBDC pushed by the Fed would threaten Americans’ privacy.
“The Biden Administration has proven they are itching to trade Americans’ right to privacy for a CCP-style CBDC surveillance tool.”
Should both bills pass the US House and Senate and become law, they could provide the regulatory clarity the industry has long sought.
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