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The historic cryptocurrency bill receives strong support in the House, but the obstacle in the Senate looms
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The cryptocurrency industry scored a huge victory in Washington last week when the House of Representatives voted in favor of a bill designed to establish a regulatory framework for digital assets and clarify regulators’ respective jurisdictions. However, the legislation – called the Financial Innovation and Technology for the 21st Century Act, or FIT21 – still needs approval from the Senate, whose expectations are low.
The U.S. House voted overwhelmingly in support of FIT21, recording 279-136 vote.
President Joe Biden, however, opposed passing the bill, as it does not provide “sufficient protections for consumers and investors who engage in certain digital asset transactions,” according to a report. declaration. Always opposed to the legislation, Gary Gensler, chairman of the Securities and Exchange Commission, argued that it was not necessary and placed a risk to current securities regulations.
“We believe such strong support from Democrats for this extremely important bill highlights the increasingly bipartisan nature of crypto politics and sends a message that the status quo isn’t working,” Oppenheimer analyst Owen Lau wrote in a known to customers.
A central component of FIT21 is its proposal to elevate the Commodity Futures Trading Commission to the primary supervisor of digital assets. The agency would also hold exclusive regulatory authority over cash or spot markets for so-called digital commodities. The SEC’s regulatory jurisdiction, meanwhile, would extend to digital assets with non-decentralized blockchains. The securities regulator would also be responsible for new regulatory processes for digital asset trading systems.
This regulatory regime is exactly what the cryptocurrency world has wanted over the years, as there would be distinct boundaries defining what falls under the jurisdiction of the CFTC versus the SEC.
There has been debate for years over whether cryptocurrencies should be considered securities or commodities, suggesting that current cryptocurrency oversight in the United States lacks common ground. If a digital token were classified as a security, issuers and exchanges would be subject to stricter rules enforced by the SEC (e.g., required to hold the necessary securities licenses), a prospect that the cryptocurrency industry has they have been fighting for a long time. The SEC defines most cryptocurrencies as securities, but the CFTC considers them commodities. Both the SEC and CFTC see bitcoin (BTC-USD) as a commodity, although the classification of ethereum (ETH-USD) is less certain between the two regulators.
Rep. Josh Gottenheimer (D-NJ), one of the Democrats who has staunchly resisted opposition from the White House and the SEC’s Gensler, She said FIT21 “clarifies regulation for digital assets, strengthens consumer protections, and ensures America continues to lead the way with these innovative technologies.”
Meanwhile, the extent of opposition the bill could face in the Senate remains uncertain. Oppenheimer’s Lau believes that “the expectation of passing the Senate is still low at this point, given the lack of similar work done in the Senate and the absence of an equivalent bill.”
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