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The FIT21 crypto regulation bill, also known as H.R. 4763, has successfully passed a crucial vote in the U.S. House of Representatives, marking a significant development in the realm of cryptocurrency regulation. However, its journey is far from over as it now faces an uncertain future in the Senate.
With 71 Democratic Party representatives and 208 Republicans in favor, and 136 against, the FIT21 bill’s passage signals a notable bipartisan effort. Yet, its fate in the Senate remains unclear due to the absence of a companion bill and the formidable opposition of Senator Elizabeth Warren, a prominent critic of cryptocurrency.
Despite the recent passing of a resolution in the Senate advocating for the elimination of a rule restricting banking and crypto activities, the path for FIT21 remains murky. There is no specific timeline for Senate consideration, potentially leading to months of deliberation.
Should the bill proceed to the Senate, it is likely to undergo rigorous scrutiny, including committee reviews, hearings, and markups. Even if it survives these stages, a majority vote of 51 senators is required for its approval.
Furthermore, potential amendments may arise during negotiations between House and Senate members to reconcile differences between their versions of the bill. Once finalized, the bill will return to Congress for ultimate approval.
President Joe Biden holds the pivotal decision-making power regarding FIT21, with a 10-day window to either sign or veto the bill. However, while his administration has expressed opposition to the bill’s passage, it remains uncertain whether he will exercise his veto power.
In the event of a veto, the House and Senate could override it with a two-thirds majority vote, underscoring the significant implications of FIT21’s potential enactment.
Despite objections from U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler, who voiced concerns about regulatory gaps and market stability, the bill’s passage is celebrated within the crypto industry. Coinbase CEO Brian Armstrong hails it as a victory for establishing clear regulatory frameworks, particularly noting the support garnered from Democratic representatives.
However, amidst the jubilation, voices of caution emerge. Legal experts like Gabriel Shapiro caution that FIT21 could grant the SEC substantial regulatory authority, potentially leading to a dual regulatory regime alongside the Commodity Futures Trading Commission (CFTC).
FIT21 predominantly entrusts crypto oversight to the CFTC, perceived by the industry as a more lenient regulator compared to the SEC. Nevertheless, the bill introduces mechanisms for certain cryptocurrencies to be classified and traded as commodities rather than securities, further complicating the regulatory landscape.
As FIT21 navigates through the Senate and potential negotiations, its implications for the crypto industry remain uncertain. Whether it will establish a robust regulatory framework or introduce further complexities awaits the deliberations and decisions yet to come.