US House Passes Key Crypto Bill

US House Passes Key Crypto Bill

RegulationLaw

By Jakub Lazurek

23 May 2024 (26 days ago)

3 min read

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The US House passes the FIT21 crypto bill with bipartisan support, but it faces a tough challenge in the Senate and a potential veto from President Biden.

In a surprising move, the US House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21) with a decisive 279 to 136 vote. This bill is a big win for the crypto industry, aiming to create much-needed rules for digital assets in the US.

The bill received unexpected backing from former House Speaker Nancy Pelosi, who called it a “first step” towards regulating the growing crypto sector. Pelosi’s support helped gather bipartisan backing, with 71 Democrats joining 208 Republicans in favor. This marks a rare moment of unity across party lines.

However, the bill still faces hurdles. It now heads to the Senate, where crypto regulation remains a tough issue. While the House’s support is a good sign, the Senate and the Biden administration will be harder to convince.

Both the Securities and Exchange Commission (SEC) and the White House have expressed concerns about FIT21. SEC Chair Gary Gensler says the bill lacks enough consumer protections and believes existing rules can cover cryptocurrencies. The White House agrees, calling for a more thorough approach based on current laws. President Biden has threatened to veto the bill, insisting on stronger protections.

The passage of FIT21 is a key moment in the debate over US crypto regulation. For years, the crypto industry has operated in a regulatory grey area, which has slowed innovation and hurt investor confidence. Supporters of FIT21 think the bill will provide clarity, help businesses operate more confidently, and encourage innovation.

However, regulators are cautious. Their main concern is protecting consumers from the risks of cryptocurrencies, like volatility and scams. They also stress the need for strong rules to prevent money laundering and other illegal activities.

The future of FIT21 is uncertain. The Senate could change the bill significantly, possibly adding stricter consumer protections or even rejecting it. Negotiations among lawmakers, regulators, and the White House will be crucial in shaping US crypto rules.

The House’s passage of FIT21 is just the beginning of a complex process. The coming months could see intense debates and potential compromises, or the bill could face a deadlock. The outcome will impact investors, businesses, and the future of digital finance.

The progress of FIT21 highlights the growing importance of cryptocurrencies in finance. As digital assets become more common, clear rules are essential to promote innovation while protecting consumers and ensuring stability. The debate over FIT21 shows the need to balance new technology with public safety.

In summary, the FIT21 bill's passage in the House is a big step towards creating rules for cryptocurrencies in the US. With bipartisan support, the bill has made progress, but it still faces major challenges in the Senate and from the Biden administration. The upcoming discussions will be key in deciding the future of crypto regulation and its effect on the financial sector.

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