The U.S. House of Representatives passed a bill this week that seeks to provide consumer protections and regulatory certainty for digital assets.
The Financial Innovation and Technology for the 21st Century Act (H.R. 4763), or FIT21, would provide the Commodity Futures Trading Commission (CFTC) with new jurisdiction over digital commodities and clarifies the Securities and Exchange Commission’s (SEC) jurisdiction over digital assets offered as part of an investment contract.
The bill also establishes a process to permit the secondary market trading of digital commodities if they were initially offered as part of an investment contract. In addition, it imposes customer disclosure, asset safeguarding, and operational requirements on all entities required to be registered with the CFTC and/or the SEC.
“Today, the House took a historic step by passing FIT21 with broad, bipartisan support,” U.S. Rep. Patrick McHenry (R-NC) chair of the House Financial Services Committee, said. “FIT21 provides the regulatory clarity and robust consumer protections necessary for the digital asset ecosystem to thrive in the United States. The bill also ensures America leads the financial system of the future and remains a hub for technological innovation.”
The bill was initially introduced by U.S. Reps. Glenn Thompson (R-PA), French Hill (R-GA), Dusty Johnson (R-SD), Tom Emmer (R-MN), and Warren Davidson (R-OH). McHenry is a cosponsor of the legislation.
“Clarity in digital assets is crucial. Today’s bipartisan passage of the Financial Innovation and Technology for the 21st Century Act is a significant milestone. It underscores the House Committees on Agriculture and Financial Services’ efforts to establish a much-needed regulatory framework,” Thompson said. “This framework is designed to protect consumers and investors while fostering American leadership in the digital asset space. I extend my thanks to Chairman McHenry for his leadership and that of our subcommittee chairs, Rep. Johnson and Rep. Hill, in moving this legislation.”
Hill called it a historic day for American consumers, investors, and innovators.
“I applaud the House’s bipartisan passage of FIT21, which crafts a ‘fit for purpose’ regulatory framework for digital assets that protects consumers and investors while securing the United States as a leader in blockchain innovation. As FTX’s collapse showed, we need a functional regulatory framework in place to create consumer protections that currently do not exist, while ensuring America is a leader in the digital asset market,” Hill said. “This legislation passed in a bipartisan manner, signaling that consumer protection and American innovation are priorities for lawmakers on both sides of the aisle.”