The U.S. House of Representatives passed a landmark bill (FIT21) for regulating digital assets, marking a significant shift in political dynamics. With bipartisan support, the bill garnered 71 votes from Democrats and 208 from Republicans.
This legislation is seen as a symbolic victory for the crypto industry, according to Kristin Smith, CEO of the Blockchain Association. She emphasizes Congress's role in shaping policy and the industry's growing influence in advocating for fair regulations. The passage of FIT21 coincided with a rise in BTC price. Whether this is directly related to or reflects broader market trends remains to be seen.
The House Financial Services Committee hailed the bill's passage as a turning point for the American digital asset market. Notably, a significant number of House Democrats, including Speaker Emerita Nancy Pelosi, supported FIT21.
Interestingly, the SEC's approval of Ethereum spot-market ETFs coincides with this development, showcasing a broader shift in policy stances. Additionally, the Senate demonstrated bipartisan support for overturning a regulation (Staff Accounting Bulletin 121) that eases restrictions for digital asset custodians.
However, concerns remain about FIT21's dual-agency oversight model (CFTC and SEC). As Kristin Smith points out, assigning regulatory authority based on an asset's decentralization level can create confusion for market participants. She hopes the Senate will address this complexity in their version of the bill.
This dual approach aims to limit the SEC's control, seen as an impediment to innovation. Polkadot serves as an example of how difficult it can be to regulate crypto assets because of their dynamic nature. Ultimately, the SEC's determination of an asset's decentralization might still hinder innovation if definitions remain narrow.
Despite these concerns, many in the crypto community view FIT21 as a crucial step towards comprehensive regulation, similar to what exists in the EU and Singapore. Experts like Jake Chervinsky and Matthew Le Merle warn that anti-crypto policies could negatively impact politicians. They see FIT21's passage as a signal to the current administration.
Whether FIT21 becomes law in 2024 remains uncertain, especially with the upcoming elections. However, the growing political support and public interest in crypto regulation suggest a reasonable chance of success. President Biden's openness to balanced regulations could also pave the way for workable legislation.