Congress Advances FIT21 Bill to Clarify Crypto Regulations

Congress Advances FIT21 Bill to Clarify Crypto Regulations

The United States House Financial Services Committee is advancing the Financial Innovation and Technology to the 21st Century Act, or FIT21, which aims to clarify the roles of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in digital asset regulation. The bill, initially proposed in July 2023, will soon be debated in a floor session.

Championed by Congressmen Patrick McHenry and French Hill, the FIT21 bill seeks to establish a cohesive regulatory strategy between relevant U.S. agencies. The legislation aims to expand the CFTC’s jurisdiction over cryptocurrency products while defining the SEC’s authority over various crypto-related matters. This effort responds to the rapid development and expansion of the digital asset market, highlighting the need for regulatory oversight.

The crypto industry has welcomed the steps toward regulatory clarity. Sheila Warren, Chief Executive of the Crypto Council for Innovation, acknowledged the bill’s significance despite some gaps. She emphasized that FIT21 represents a substantial move toward a federal framework for digital assets, balancing innovation with investor protection.

Digital asset regulation has become a key issue in U.S. politics, influencing midterm elections and prompting candidates to focus on consumer protection, financial stability, and national security in their policy platforms. Coinbase’s political action committee, Stand With Crypto, supports pro-crypto candidates, further highlighting the political importance of regulatory clarity.

Congressman Patrick McHenry, a significant advocate for crypto regulation, will not seek reelection, adding uncertainty to the future of crypto legislation. His tenure has been marked by efforts to create a nonpartisan regulatory environment conducive to innovation and investor protection.

The FIT21 bill, while still facing hurdles in the legislative process, marks a critical step toward resolving regulatory ambiguities in the cryptocurrency sector.

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