The cryptocurrency industry scored its biggest win ever in US politics on Wednesday when the House of Representatives approved a wide-ranging bill to establish regulations for digital asset markets, recording a 279-136 vote that saw Democrats cross party lines to support it.
The Financial Innovation and Technology for the 21st Century (FIT21) Act marks the first time a major cryptocurrency bill has been approved in either chamber of Congress. Now the issue is heading to the US Senate, where its future has become more uncertain, due to the lack of a similar bill. Support for such an effort remains unclear there, and the necessary committees have not done the same level of work in the cryptocurrency space.
The United States has lagged behind other global jurisdictions in establishing cryptocurrency regulations, and despite a win on Wednesday, implementing such oversight is still far from complete.
“We need rules of the road,” the MP said. Josh Gottheimer (D.N.J.), one of the Democrats who bucked the White House opposition and the ranking Democrat on the House Financial Services Committee, Rep. Maxine Waters (D-CA). He called it “common sense, thoughtful, bipartisan legislation” and argued before the vote that it was “appropriate that it becomes law if we work together.”
Overall, 71 Democrats and 208 Republicans voted in favor of the bill, compared to 3 Republicans and 133 Democrats who voted against it.
President Joe Biden opposed the bill with a political statement, though he did not say he would veto the bill, as he did recently when Congress sought to overturn the SEC’s efforts to set cryptocurrency accountability policy. SEC Chairman Gary Gensler also strongly opposed the legislation in a lengthy public statement, arguing that the bill is unnecessary and jeopardizes existing securities regulations.
The legislation — largely led by House Republicans — would create a system to regulate cryptocurrency markets in the United States, establish consumer protections, and install the Commodity Futures Trading Commission (CFTC) as the leading digital asset regulator and oversight body for spot markets. Other than securities. It will more clearly define what makes a crypto token a security or a commodity.
Waters argued that the bill seeks to allow cryptocurrency companies that have been evading securities laws to avoid liability.
“They have already made billions of dollars from illegally issuing or facilitating the purchase and sale of crypto securities,” Waters said. “Republicans now propose to reward these illegal activities by making these activities legal.”
Before the vote on Wednesday afternoon, the House discussed a range of amendments to the bill, including by MPs. Greg Casar (D-Texas), Brittany Petersen (d-company), Ralph Norman (RSC) and Scott Perry (Republican of Pennsylvania). Cassar’s amendment to change the crowdfunding exemption from $75 million to $5 million was rejected, but the remainder was approved.
Updated (22 May 2024, 21:48 UTC): Adds vote count, removes reference to CBDC bill.
