The process of implementing the Financial Innovation and Technology for the 21st Century Act (FIT21) may be a time-consuming endeavor, potentially requiring months or even years of coordination among United States regulators before the rules take effect.
During a panel discussion at the 2024 Consensus event, Summer Mersinger, Commissioner of the Commodity Futures Trading Commission (CFTC), anticipated a slow regulatory process for the bill if it becomes law.
Mersinger pointed out that if legislation takes a long time to pass, rulemaking also takes a significant amount of time. She cited the ongoing process of finalizing the Dodd-Frank rules, which are still not complete. Mersinger emphasized that the length of the process would depend on how Congress passes the legislation. She further explained that after a bill becomes law, regulatory bodies such as the Securities and Exchange Commission (SEC) and CFTC must enforce the new rules. This involves drafting detailed regulations, allowing for a public comment period, and potentially incorporating revisions based on the feedback received. This phase can extend over several months or even years, as seen with the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in 2010.
The FIT21 bill has successfully passed the House of Representatives with support from both sides of the aisle and is now facing its next hurdles in the Senate. This legislation aims to clarify the regulatory responsibilities of the SEC and CFTC regarding digital assets.
The administration of Joe Biden has expressed concerns about the bill, suggesting that there may be regulatory gaps that could impact market stability. However, it has not explicitly stated whether a veto would be considered.
Also participating in the panel discussion, SEC Commissioner Hester Pierce noted that Congress’ interest in cryptocurrency legislation is a response to the agency’s approach to enforcing regulations on crypto firms. Pierce stated that Congress’s interest in crypto is positive, as it highlights the SEC’s failure to utilize the flexibility granted by Congress to address the application of the law to new and challenging aspects of the industry.
Image Source: Turner Wright/Cointelegraph
Caption: Nick De, Summer Mersinger, and Hester Pierce at Consensus 2024.
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