Markets
Crypto Market Regulation: Early US House Vote
TDR’s three main conclusions about crypto market structure and crypto market regulation:
- Lawmakers push for clear crypto market regulations under FIT21.
- The stability of the crypto market and the security of investors are highlighted in the FIT21 bill.
- Crypto market regulation is at stake with the Senate decision on FIT21.
The US House of Representatives is set for a critical vote on the “Financial Innovation and Technology for the 21st Century Act” (FIT21), which could significantly influence the structure of the crypto market. This bill, approved by 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).
The legislation seeks to fill regulatory gaps highlighted by the collapse of cryptocurrency exchange FTX, underlining the need for a strong regulatory framework. Representative French Hill emphasized the bipartisan efforts behind this initiative, saying, “After working tirelessly across sectors and across the country over the past year to craft a clear and pragmatic regulatory framework for digital assets, I am proud that this historic legislation is coming. the floor of the house. The objective goes beyond strengthening consumer protection; it also aims to solidify America’s leadership in the blockchain sector.
The collapse of FTX highlighted weaknesses in crypto market regulation, underlining the need for strict 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 in innovation in blockchain,” Hill explained. The FIT21 bill is considered a crucial step towards achieving these goals.
The bill’s progress is not yet guaranteed, with its outcome in the US Senate still uncertain, despite strong bipartisan support in the House. The legislation is particularly timely as digital asset regulation becomes more crucial in election year politics, with lawmakers interested in positioning the US as a leader in blockchain innovation.
The US House vote on the structure of the crypto market could significantly influence the regulation of digital assets and affect consumer protection and the US position in the global blockchain market. This decision is crucial for stakeholders, from investors to regulators. Want to stay up to date with all TDR research and news, subscribe to our daily newsletter Baked In newsletter.