On Wednesday, the U. S. House of Representatives made a notable advance by voting 279-136 to approve the Financial Innovation and Technology for the 21st Century Act (FIT21). This bipartisan backing constitutes a key milestone for the cryptocurrency sector, marking the most significant legislative success for digital assets so far. With a considerable number of House Democrats crossing party lines, the bill’s endorsement reflects a strong push for clearer regulations in the digital asset market. FIT21 is the first major cryptocurrency legislation to pass one chamber of Congress. The next hurdle is the U. S. Senate, where the bill’s future remains uncertain. Unlike the House, the Senate has not introduced an equivalent bill, and the extent of support for similar measures is unclear. Additionally, Senate committees relevant to the issue have not devoted comparable attention to cryptocurrency, increasing uncertainty about the bill’s prospects. Primarily driven by House Republicans, the legislation aims to establish a regulatory framework for U. S. crypto markets. It outlines consumer protections and assigns the Commodity Futures Trading Commission (CFTC) as the primary regulator for digital assets, specifically overseeing non-securities spot markets. The bill also strives to clarify the distinctions between securities and commodities regarding cryptocurrency.

Representative Maxine Waters (D-Calif. ), the top Democrat on the House Financial Services Committee, criticized the bill, asserting that it would permit crypto businesses to evade current securities laws. She argued these companies have already gained substantial profits from what she described as illegal activities and that the bill would effectively legalize such practices. Prior to the vote, the House debated several amendments proposed by Representatives Greg Casar (D-Texas), Brittany Pettersen (D-Colo. ), Ralph Norman (R-S. C. ), and Scott Perry (R-Pa. ). Casar’s amendment to reduce the crowdfunding exemption from $75 million to $5 million was rejected, whereas the other proposed changes were accepted. This legislative development occurs amid a period when centralized cryptocurrency platforms dominate Blockchain-related mergers and acquisitions (M&A). According to GlobalData’s 2024 Blockchain technology report, M&A activity involving Blockchain has increased, constituting 3. 7% of all technology M&A deals in 2023, up from 2. 2% in 2020. The primary targets have included Blockchain development platforms, mining infrastructure, and crypto exchanges. Leading the surge in M&A are major centralized crypto exchanges like Coinbase and Kraken. From 2014 to 2023, most of these deals were U. S. -based, accounting for 35% of all global Blockchain-related M&A transactions. The House’s passage of FIT21 represents a major policy win for the U. S. crypto industry, despite significant opposition from some lawmakers and regulatory officials. As the bill advances to the Senate, debates over the proper regulatory approach for digital assets are expected to intensify. Whether FIT21 can garner enough Senate backing to become law remains uncertain, but its House approval marks a pivotal step toward establishing a clearer regulatory framework for the rapidly growing cryptocurrency market.