The U.S. House of Representatives passed the Republican-sponsored Financial Innovation and Technology for the 21st Century Act, which aims to establish a new legal framework for digital currencies. The bill passed in a bipartisan vote of 279-136 but faces uncertainty in the Senate. While the bill is seen by supporters as a means to provide regulatory clarity and foster industry growth, SEC Chair Gary Gensler warned that it could create new regulatory gaps and undermine existing financial oversight mechanisms.
The bill was passed by the House on Wednesday, though the exact date was not specified. The passage comes amidst indications from the SEC that it might approve applications for spot ether exchange-traded funds, suggesting a significant period of regulatory developments for digital currencies.
The legislative action took place in the U.S. House of Representatives, impacting the regulatory landscape of digital currencies nationwide.
The bill proposes changes that would potentially exempt certain digital currency investment contracts from being classified as securities, thereby altering how they are regulated under U.S. securities laws. This includes a provision that allows issuers of crypto investment contracts to self-certify their products as digital commodities, which would not be subject to SEC oversight unless contested by the agency within 60 days. Gary Gensler’s criticism highlights concerns over investor protection and the preservation of established financial regulatory frameworks.
The passage of the Financial Innovation and Technology for the 21st Century Act by the House represents a significant development in the ongoing debate over digital currency regulation in the U.S. The crypto industry has often found itself at odds with regulatory bodies like the SEC, which seeks to extend traditional financial securities laws to digital assets. This legislative move, therefore, is viewed by many in the crypto community as a potential breakthrough in their long-standing efforts to reduce regulatory hurdles and promote broader adoption of digital assets. However, the concerns articulated by SEC Chair Gensler reflect a cautious approach towards financial innovations that might bypass existing protections for investors and the integrity of capital markets.
