The House Financial Services Committee and House Agriculture Committee advanced a bill aimed at regulating digital assets Wednesday and Thursday, marking a historic move forward for crypto legislation to be considered before the full House.
The Financial Innovation and Technology for the 21st Century Act passed out of the House Financial Services Committee in a 35-15 vote Wednesday night, with a few Democrats supporting the otherwise Republican-led bill. The bill passed out of the House Agriculture Committee via voice vote on Thursday.
Senior GOP lawmakers in both committees introduced the legislation July 20, following the release of a draft bill in early June.
"The FIT for the 21st Century Act provides the CFTC the jurisdiction over digital commodities, and clarifies the SEC's remit over digital assets offered as a part of an investment contract," Rep. French Hill, R-Ark., chair of the House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion, said Wednesday during the bill's markup.
Mr. Hill sponsored the bill alongside Subcommittee Vice Chairman Warren Davidson, R-Ohio; House Agriculture Committee Chairman Glenn "GT" Thompson, R-Pa.; Rep. Dusty Johnson, R-S.D., who chairs House Agriculture's subcommittee on digital assets; and House Majority Whip Tom Emmer, R-Minn.
As Mr. Hill laid out, the bill gives the CFTC new authority over digital commodity markets, while maintaining the SEC's authority over digital securities. It also calls on both regulators to create joint rulemakings on the issue, and allows digital asset intermediaries dual registration with the SEC and CFTC.
"The U.S. regulatory permafrost is thawing," Sheila Warren, CEO of the Crypto Council for Innovation, said in a statement Thursday. "For the first time, Congress took critical steps to establish a comprehensive federal regulatory framework for digital assets in the U.S."
"This bill is filling the gaps in the existing system," Mr. Hill said Wednesday. "The existing system does not work."
However, most Democrats in the Financial Services Committee opposed the bill, as some have been saying for months that new legislation is not needed.
"As I have said before, we don't need to invent new regulatory structures simply because crypto companies refuse to follow the rules of the road," ranking member Maxine Waters, D-Calif., said Wednesday.
Meanwhile, bipartisan negotiations over a stablecoin regulation bill, led by Chairman Patrick McHenry, R-N.C., fell apart Thursday.
"Important legislation takes time, but the chair is impatient and has decided to abruptly end our negotiations and move forward with a bill that is deeply problematic," Ms. Waters said at the bill's markup on Thursday.
Mr. McHenry, on the other hand, blamed the White House, stating, "It was the White House's unwillingness to compromise that has once again brought that negotiation to a halt."
As of publication, the House Financial Services Committee was still considering amendments to the bill.