In a milestone development for the crypto industry, the US House Financial Services Committee has achieved a significant victory by advancing a bipartisan bill aimed at establishing a regulatory framework for Bitcoin and cryptocurrencies. The bill’s passage represents Capitol Hill’s efforts to provide much-needed clarity and regulation for investors and the digital asset industry as a whole.

The crypto industry has come under intense scrutiny since investors faced substantial losses last year due to sudden collapses of prominent companies. This bill passed by the House Financial Services Committee aims to define whether a cryptocurrency should be classified as a security or a commodity, while expanding the oversight of the Commodity Futures Trading Commission (CFTC) in the crypto market.

Simultaneously, the bill aims to address concerns over the Securities and Exchange Commission’s (SEC) jurisdiction, thus clarifying the agency’s perceived overreach, which has been a point of contention among crypto advocates. The SEC recently escalated its actions by filing lawsuits against leading exchanges, Coinbase and Binance, for allegedly failing to register certain tokens as securities.

Representative Patrick McHenry, the Republican chair of the House Financial Services Committee, has been a key proponent of the bill. He expressed his determination to position the United States at the forefront of digital asset regulation, highlighting the progress made by countries such as the UK, the European Union, Singapore, and Australia in implementing clear regulatory frameworks for digital assets.

The House Financial Services Committee’s markup, where the legislation was debated and voted upon, marks the first time a crypto regulatory bill has undergone such a process in Congress. This achievement signifies a resounding success for the industry, which has lobbied tirelessly for regulatory certainty.

Remarkably, the bill has garnered considerable support from the crypto industry and enjoys backing from Democrats, increasing its chances of making headway in the Senate. However, not all Democrats are in favor of the bill. Representative Maxine Waters, the top Democrat on the Financial Services Committee, staunchly opposes the legislation, arguing that it would create more confusion and provide fewer protections for consumers and investors compared to the current regulatory landscape. The bill’s journey through the Democratic-led Senate might present additional challenges, as the crypto-critic and head of the Senate Banking Committee, Sherrod Brown, has expressed uncertainty about the need for further regulation.

In addition to the landmark crypto bill, lawmakers are set to consider another bill that focuses on the Federal Reserve’s establishment of requirements for issuing stablecoins while preserving state regulators’ authority. The bill has been modified to address concerns from Democrats, who feared that stablecoin issuers could potentially evade stricter oversight through state-level regulation.

Voices from the industry are celebrating the FIT for the 21st Century Act, despite ongoing negotiations and differing views. Jerry Brito, executive director of Coincenter, celebrated the bipartisan passage, emphasizing the bill’s importance in safeguarding individual rights to write and use cryptocurrency software. Coinbase CEO Brian Armstrong encouraged everyone to support the bill, highlighting its significance in providing regulatory clarity, protecting American innovation, and ensuring national security. Jake Chervinsky, chief policy officer at the Blockchain Association, praised the bill’s passage as a historic day for crypto policy, underscoring the significant bipartisan support it received and its message in favor of reasonable regulation for digital assets.

The bill will continue to evolve during the legislative process. Still, its advancement represents a crucial step toward securing regulatory clarity for the crypto industry and protecting American innovation and national security.

At press time, the Bitcoin price continues to slowly rise, trading at $29,518.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.