The US House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21) by a resounding 279 to 136 vote. The bill, seen as a major win for the crypto industry, aims to establish a long-awaited regulatory framework for digital assets in the US.
FIT21: Bipartisan Support, But Hurdles Remain
FIT21 received a boost from an unlikely source – former House Speaker Nancy Pelosi. In a move defying expectations, Pelosi championed the bill, calling it a “first step” towards regulating the burgeoning crypto space. This bipartisan support, with 71 Democrats joining forces with 208 Republicans, marks a historic moment for the industry.
However, champagne corks are likely to stay popped for now. The bill faces a much tougher challenge in the Senate, where crypto regulation remains uncharted territory. While the recent shift in the House towards crypto-friendliness might offer some hope, convincing the Senate and the Biden administration will be an uphill battle.
Regulators Wary, President Threatens Veto
Both the SEC and the White House have expressed concerns about FIT21. The SEC, led by Chair Gary Gensler, believes the current bill lacks sufficient consumer protection measures and argues that existing regulations can be applied to crypto. The White House, echoing these concerns, called for a more comprehensive approach and a framework built on “existing authorities.” President Biden has even threatened to veto the bill in its current form.
As of today, the market cap of cryptocurrencies stood at $2.5 trillion. Chart: TradingView.com
A Fight For Clarity: Crypto Vs. Regulation
The passage of FIT21 signifies a turning point in the ongoing saga of US crypto regulation. For over a decade, the industry has operated in a grey area, hindering innovation and investor confidence. Proponents of FIT21 believe the bill will provide much-needed clarity, allowing businesses to operate with greater certainty.
However, regulators remain cautious. Their primary concern is protecting consumers from the inherent risks associated with cryptocurrencies, such as volatility and potential scams. They also argue that a more robust regulatory framework is necessary to prevent money laundering and other illicit activities.
The Road Ahead: Compromise Or Gridlock?
The future of FIT21 remains uncertain. The Senate could significantly alter the bill, potentially introducing stricter consumer protection measures or even scrapping it altogether. Negotiations between lawmakers, regulators, and the White House will be crucial in determining the final shape of crypto regulation in the US.
The fight for a clear regulatory path for cryptocurrencies is far from over. With both sides holding strong viewpoints, the coming months could see a period of intense debate and compromise, or potentially, gridlock. With the potential of crypto to reshape the financial landscape, the outcome of this battle will have significant implications for investors, businesses, and the future of money itself.
Featured image from The Hill, chart from TradingView
Christian Encila
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