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The U.S. House of Representatives approved bill FIT21 by a majority of 279 to 136, pushing it to the Senate. This initial approval of the Financial Innovation and Technology for the 21st Century Act (FIT21) could significantly impact the cryptocurrency market, signaling bullish sentiment across the market. This bill is a significant step toward comprehensive regulation of digital assets in the United States, potentially shaping the future of cryptocurrency trading and investment.
What is FIT21?
The FIT21 bill, produced by the House Agriculture Committee and the House Financial Services Committee, aims to clarify how the SEC classifies crypto by creating a “digital commodity” term for digital assets.
The bill’s main goals are to clarify the SEC’s regulatory roles, improve consumer protections, and create a stable environment for digital asset innovation. It aims to eradicate scams, regulate crypto exchanges, and protect consumers. Going into the vote, the bill had bipartisan support.
Holland & Knight senior policy advisor Scott Mason mentioned that FIT21 “is definitely an opportunity to give the crypto/blockchain industry confidence that the US is a friendly market… The industry is here to stay, and the US needs to lead, not follow EUR and other countries that are aggressively courting industry investment.”
The Ruling
The House proceeding started slowly after Rep. Jim McGovern commented about former President Donald Trump, leading Republicans to demand that McGovern’s “words get taken down.” This mechanism may be invoked during debate on the House floor, in the Committee of the Whole, or in the standing and select committees of the House.
The standoff over this issue lasted for over an hour before proceedings continued. Later, McGovern tweeted that he had been banned from speaking on the House Floor.
Republicans just banned me from speaking on the House Floor for the rest of the day because I listed Trump’s trials. I didn’t say he was guilty, I just stated the fact that they exist—and for that I was silenced. Apparently, Republicans are allowed to say that Trump’s trial is…
After these incidents, the bill cleared the committee, voting 204 to 203 before final debates. In final debates, Congressman Patrick McHenry cited support of FIT21, saying that the legislation “will cement the United States’ global leadership in technological innovation, invention, and adoption.”
The vote concluded 279 in favor to 136 against with 71 Democrats voting in favor of the bill.
“This vote represents years of tireless effort from policymakers, their staff, and the industry to safeguard consumers and keep the US at the forefront of digital innovation. It’s proof that innovation and consumer protection can coexist in the digital assets space. 71 Democrats voted in favor of keeping tech a nonpartisan issue.” said Sheila Warren, CEO of the Crypto Council for Innovation.
What’s Next?
Earlier on Wednesday, the White House publicly objected to the bill, citing a lack of regulatory framework for digital assets. Regardless, the Biden administration expressed a willingness to collaborate with lawmakers to create clear crypto legislation, and stated that he will not veto the bill.
The FIT21 Act’s journey does not end with a House vote. If passed, it will proceed to the U.S. Senate for further consideration. The House also voted and passed a bill explicitly banning the US Federal Reserve from issuing a CBDC.
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