US House to Vote on FIT21 Crypto Market Structure Bill in May 2024

The US House of Representatives is set to vote on the Financial Innovation and Technology for the 21st Century Act (FIT21) at the end of May 2024. The bill aims to clarify regulations for digital assets by defining responsibilities between the SEC and CFTC.

author-image
Nitish Verma
New Update
US House to Vote on FIT21 Crypto Market Structure Bill in May 2024

US House to Vote on FIT21 Crypto Market Structure Bill in May 2024

The US House of Representatives is set to vote on the Financial Innovation and Technology for the 21st Century Act (FIT21) at the end of May 2024. The crypto market structure bill, which passed the House Financial Services Committee in July 2023, aims to clarify regulations for digital assets by defining responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Why this matters: The fate of the FIT21 bill has significant implications for the future of cryptocurrency regulation in the US, which could impact the global digital asset market. A clear regulatory framework could either boost investor confidence and drive innovation or stifle growth and push businesses overseas.

The bill seeks to fill the regulatory gaps highlighted by the downfall of the cryptocurrency exchange FTX, stressing the need for a strong regulatory framework. Representative French Hill emphasized the bipartisan efforts behind this initiative, saying, "After tirelessly working across the aisle and across the nation over the past year to craft a clear, pragmatic regulatory framework for digital assets, I am proud that this landmark legislation is coming to the House Floor." Hill explained that the collapse of FTX has spotlighted the weaknesses within the crypto market regulation, underlining the need for stringent consumer protections: "As the collapse of FTX showed, we need strong consumer protections and a functional regulatory framework to ensure the rapidly growing digital asset ecosystem is safe for investors and consumers while positioning America as a leader for blockchain innovation."

Despite strong bipartisan support in the House, the bill's progress is not yet secured, with its outcome in the US Senate still uncertain. TD Cowen Washington Research Group noted, "We believe it would be a mistake to fixate on the details of this legislation. It has no chance of becoming law in this Congress." Top Democrat Rep. Maxine Waters of California has opposed the bill, while Senate Banking Committee Chair Sherrod Brown, D-Ohio, has been quiet on the issue.

The legislation is particularly timely as digital asset regulation becomes more crucial in election-year politics, with lawmakers keen to position the US as a leader in blockchain innovation. The bill sets up lawmakers for next year, providing a critical building block for Congress in 2025/26 when a renewed effort to enact crypto market structure legislation is expected.

Voting on the bill could shed light on how Democrats and Republicans view critical issues such as anti-money laundering and investor protections. Former President Donald Trump's recent support for crypto could be a future complication, potentially polarizing crypto oversight and making finding a bipartisan compromise more difficult. Trump stated, "If crypto is moving out of the U.S. because of hostility toward crypto... well, we'll stop it. We don't want that."

The US House vote on the FIT21 crypto market structure bill at the end of May 2024 marks a significant step in providing clarity for digital asset regulations. While the bill faces an uncertain future in the Senate, it lays the groundwork for future efforts to establish a comprehensive regulatory framework that balances consumer protection with fostering innovation in the rapidly evolving blockchain sector.

Key Takeaways

  • US House to vote on FIT21 crypto market structure bill in May 2024.
  • Bill aims to clarify digital asset regulations between SEC and CFTC.
  • FIT21 seeks to fill regulatory gaps highlighted by FTX's downfall.
  • Bill's fate uncertain in Senate, despite strong bipartisan House support.
  • Outcome will impact global digital asset market and US blockchain innovation.