US House of Representatives approves Crypto FIT21 bill with wave of Democratic support

The cryptocurrency industry recorded its biggest-ever victory in U.S. politics on Wednesday when the House of Representatives approved a sweeping bill to regulate digital asset markets, recording a vote of 279 to 136 that saw Democrats cross party lines to support it.

The Financial Innovation and Technology for the 21st Century Act (FIT21) is the first time a major cryptocurrency bill has been approved by either house of Congress. The matter now goes to the U.S. Senate, where its future is much more unclear because there is no corresponding bill. Support for such an effort there remains unclear, and the necessary committees have not done the same level of work on cryptocurrencies.

The United States has lagged behind other global jurisdictions in establishing cryptocurrency regulations, and despite Wednesday’s victory, the implementation of such oversight is far from complete.

“We need rules of the road,” said Rep. Josh Gottheimer (D-N.J.), one of the Democrats who defied the White House opposition and the top Democrat on the House Financial Services Committee, Rep. Maxine Waters (D-N.Y.). -California.). He called it “well-reasoned, well-thought-out, bipartisan legislation” and argued before the vote that it was “worth becoming law if we work together.”

A total of 71 Democrats and 208 Republicans voted for the bill, compared to 3 Republicans and 133 Democrats who voted against it.

President Joe Biden opposed the bill in a policy statement, although he did not say he would veto it, as he did recently when Congress tried to overturn efforts by the Securities and Exchange Commission (SEC) to set crypto accounting policy. SEC Chairman Gary Gensler also fiercely opposed the legislation in a lengthy public statement, arguing that the bill was unnecessary and threatened existing securities regulations.

The legislation – largely led by House Republicans – would establish a system to regulate U.S. cryptocurrency markets, establish consumer protections, establish the Commodity Futures Trading Commission (CFTC) as the lead regulator of digital assets and the authority overseeing non-securities cash markets, and more clearly would define what makes a cryptographic token a security or commodity.

Waters argued that the bill is intended to allow crypto companies that evade securities laws to avoid liability.

“They have already made billions of dollars by illegally issuing or facilitating the buying and selling of cryptocurrencies,” Waters said. “And Republicans are now proposing to reward these illegal activities by making them legal.”

Before the vote Wednesday afternoon, the House discussed several amendments to the bill, including those from Reps. Greg Casar (D-Texas), Brittany Pettersen (D-Co.), Ralph Norman (R-S.C.) and Scott Perry ( R-Pa.). Casar’s amendment changing the crowdfunding exemption from $75 million to $5 million was defeated, but the remainder was passed.

UPDATE (May 22, 2024 21:48 UTC): Adds vote count, removes mention of CBDC account.