What Can the US Crypto Market Anticipate from the Final Vote on the FIT21 Bill Next Week?

House lawmakers are preparing to vote on the Financial Innovation and Technology for the 21st Century Act (FIT21), a bill that aims to bring regulatory clarity to the crypto market in the United States. The bill has garnered support from major crypto exchanges such as Gemini, Kraken, and Coinbase, as well as firms like Andreessen Horowitz and Digital Currency Group. This vote is seen as a crucial moment for the crypto market as it moves towards establishing clear rules and regulations.
A total of sixty crypto organizations have expressed their support for the market structure bill, urging House lawmakers to pass it. The Crypto Council for Innovation, in a letter sent to House Speaker Mike Johnson and House Minority Leader Hakeem Jeffries, highlighted the need for clear rules and stated that current regulations do not account for the technological advancements of today’s digital assets. The groups recognize that FIT21 will bring new compliance challenges, but they believe that a comprehensive federal regulatory framework is necessary.
The FIT21 Act is scheduled for a vote next week and aims to designate the Commodity Futures Trading Commission (CFTC) as the primary regulator of digital assets. It defines the responsibilities of the CFTC and the Securities and Exchange Commission (SEC) and introduces consumer protections, including custody rules and safeguards against risky behavior. The bill also addresses asset treatment in bankruptcy cases.
Ji Kim, head of global policy at the Crypto Council for Innovation, acknowledged that no bill is perfect but emphasized that this legislation establishes a much-needed comprehensive regulatory framework. Kim expressed a willingness to collaborate with policymakers to protect consumers and promote innovation in the US crypto industry.
In addition to the major crypto exchanges, Gemini, Kraken, and Coinbase, the letter was also signed by firms like Andreessen Horowitz and Digital Currency Group. The crypto industry has recently enjoyed support in Washington, as both the House and Senate passed a resolution overturning the SEC’s crypto accounting policy, despite President Joe Biden’s veto threat. However, the upcoming comprehensive legislation in the House holds greater significance, and key Senate Democrats have yet to show comparable support. The Senate has hinted at the inclusion of a different crypto bill, focused on regulating stablecoin issuers, in a package deal with other financial legislation.