FIT21 crypto bill passes US House: Here’s what could happen next
A bill clarifying the United States securities and commodities regulator’s roles in policing crypto is headed to an unknown future as it makes its way to the Senate before hitting U.S. President Joe Biden’s desk.
The Republican-led Financial Innovation and Technology for the 21st Century Act (FIT21), or H.R. 4763, passed the House on May 22 with 71 Democrats and 208 Republicans in favor and 136 against.
Its future in the Senate is unclear with no companion bill and going up against one of the country’s biggest crypto critics , Elizabeth Warren. The same Senate passed a resolution last week calling to kill a rule restricting banks and crypto firms from doing business, however.
The final House vote on FIT21. Source: U.S. House of RepresentativesIt could still be months until the 100-member Senate considers FIT21 — there’s no time constraint on when Senators must act on it.
Even if they do, the bill would likely be assigned to a committee for possible rounds of reviews, hearings and markups. If it survives that, then a majority — 51 senators — must vote in favor for it to pass.
Parts of FIT21 could change, and House and Senate members will meet to iron out any differences in their respective versions of the bill. The bill will then go back through the House and Senate for final approval.
President Biden will then have ten days to sign or veto FIT21. However, his administration said on May 22 that it opposed passage of the bill but didn’t say he would veto it.
Even if Biden vetoes FIT21, the House and Senate could override him by passing it back through both chambers with at least a two-thirds majority vote.
Industry cheers passage
SEC Chair Gary Gensler publicly opposed FIT21 on May 22, saying it creates “new regulatory gaps” and risks capital markets stability. Its passing in the House has been seen by many as an early win for crypto.
Coinbase CEO Brian Armstrong described the bill’s passage, along with getting 71 Democrats onside as “a total victory” and a win for “clear crypto rules.”
“That is a huge number of elected Democrats voting ‘no confidence’ in the current SEC,” said Variant Fund legal chief Jake Chervinsky.
Source: Jake ChervinskyHowever, crypto-focused lawyer Gabriel Shapiro has thrown cold water on the celebration, arguing on X that FIT21 would still give the SEC “huge power.”
Related: Ethereum ETF approvals becoming 'giant political issue' — Joseph Lubin
“It provides for a dual regulatory regime, split between SEC and CFTC,” he added. “It does this by giving the CFTC authority it never had — regulatory authority over a spot commodities market.”
FIT21 largely hands control of crypto to the Commodity Futures Trading Commission, which the industry sees as a more relaxed regulator than its securities-regulating counterpart.
The SEC, however, would have regulatory power over cryptocurrencies that aren’t sufficiently decentralized but FIT21 also would create a way for cryptocurrencies it deemed securities to be sold as commodities.
Magazine: Lawmakers’ fear and doubt drives proposed crypto regulations in US
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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