The House Financial Services Committee announced Friday, May 10, its intention to consider the Financial Innovation and Technology for the 21st Century (FIT21) Act.
This announcement paves the way for a crucial floor vote later this month, signaling Congress commitment to providing clarity and regulatory certainty for cryptocurrency and other digital assets.
In its forecast on crypto regulation, crypto.news highlighted the FIT21 Act as one of the main pieces of legislation to be addressed in 2024.
Chairman Glenn Thompson introduced the act alongside Rep. French Hill, Rep. Dusty Johnson, Whip Tom Emmer, and Rep. Warren Davidson. It aims to establish clear and functional federal requirements for crypto markets. It seeks to provide necessary consumer protections and regulatory clarity for the U.S. crypto industry to grow.
House Financial Services Committee Chairman Patrick McHenry emphasized the importance of the FIT21 Act in addressing longstanding regulatory uncertainties, stating, “For far too long, the U.S. digital asset ecosystem has been plagued by regulatory uncertainty that has stifled innovation and left consumers unprotected.”
McHenry added, “This comprehensive market structure legislation is the culmination of years of bipartisan efforts to finally provide clarity.”
For too long, the U.S. digital asset ecosystem has been plagued by regulatory uncertainty that stifled innovation and left consumers unprotected.#FIT21 will cement American leadership of the global financial system and bolster our role as an international hub for innovation. https://t.co/SI1ovRXk4c
— Patrick McHenry (@PatrickMcHenry) May 10, 2024
The FIT21 Act proposes several key measures to strengthen transparency, accountability, and consumer protections within the crypto asset ecosystem.
It grants the Commodity Futures Trading Commission (CFTC) new jurisdiction over crypto commodities.
It clarifies the Securities and Exchange Commission’s (SEC) purview over digital assets offered as part of an investment contract.
Congressman French Hill highlighted the significance of the legislation in light of recent market events, stating, “As the collapse of FTX demonstrated, 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 securing America as a leader for blockchain innovation.”
Also reacting to the announcement, Ro Khanna, the U.S. representative from California’s 17th congressional district, took to X to emphasize that regulatory uncertainty has driven innovation and job opportunities away from the United States.
1/2 Congress will finally bring clarity & safety to blockchain. This builds on a bill I co-led. Innovation & jobs have left because of regulatory uncertainty. I will support this bill provided no poison pill amendments as it defines what is a security and what is a commodity. https://t.co/3g4ENkB8Ad
— Ro Khanna (@RoKhanna) May 10, 2024
He pledged his backing for the bill, provided that no detrimental amendments are added. Khanna also highlighted the importance of defining what constitutes a security versus a commodity and implementing necessary safeguards to shield consumers from scams.
The legislator expressed eagerness to support amendments that enhance consumer protections as the bill progresses through the legislative process.