A vast majority of members in the United States House of Representatives have given their support to a bill that aims to bring clarity to the regulation of digital assets. The vote, which took place on May 22, saw House lawmakers approve H.R.4763, known as the Financial Innovation and Technology for the 21st Century (FIT21) Act, with a vote of 279 to 136. If the bill is passed by the Senate and signed into law, it will define the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in relation to digital assets. A total of 71 Democrats joined forces with 208 Republicans to vote in favor of the legislation.
Representative Patrick McHenry expressed his dissatisfaction with the current regulatory framework, stating that it is hindering the full potential of digital asset innovation. He also highlighted the ongoing struggle for control over these asset classes between the SEC and the CFTC. On the other hand, Representative Maxine Waters, speaking before the vote, announced her intention to oppose the FIT21 bill. She argued that the bill would create a “regulatory no man’s land” for cryptocurrencies and enable traditional financial firms to operate without oversight from the SEC. Waters described the proposal as the “worst, most harmful” she had seen in a long time, expressing concerns about its potential to cause a market crash and recession.
In addition to the FIT21 Act, the House is set to discuss and vote on H.R. 5403, also known as the Central Bank Digital Currency (CBDC) Anti-Surveillance State Act. This bill aims to prohibit the Federal Reserve from issuing a digital dollar through intermediaries. The Democratic Party leadership reportedly stated that they did not support their members voting in favor of either the anti-CBDC bill or the FIT21 bill. However, they also mentioned that they would not impose a whip against the legislation.
These legislative developments in the crypto space, along with the pending decision by the SEC on a spot Ether exchange-traded fund, are taking place as the United States enters a crucial election year. Digital assets have become a significant topic for many voters, with President Joe Biden and former President Donald Trump, the presumed candidates for the Democratic and Republican Parties in 2024, agreeing to two debates on June 27 and September 10. The SEC is now facing a fierce battle against the legal firepower of the crypto industry, akin to the epic showdown between Godzilla and Kong.