Overview of the U.S. House of Representatives Passing H.R. 4763: The “Financial Innovation and Technology for the 21st Century Act” (FIT21)
The U.S. House of Representatives made a significant move on May 22, 2024, by passing H.R. 4763, also known as the “Financial Innovation and Technology for the 21st Century Act” (FIT21). This legislation aims to introduce comprehensive rules for the digital asset ecosystem in the United States, providing regulatory clarity and consumer protection to support digital asset innovation.
Introduced in July 2023, FIT21 received bipartisan support, highlighting the broad consensus on the need for comprehensive digital asset regulation. The bill was championed by Chairman Glenn “GT” Thompson and cosponsored by Representatives French Hill, Dusty Johnson, Whip Tom Emmer, and Warren Davidson, with Chairman Patrick McHenry also supporting the legislation.
The main goal of FIT21 is to establish clear federal requirements for digital asset markets, ensuring regulatory clarity for market participants while maintaining robust consumer protection measures necessary for the ecosystem to thrive in the U.S.
The structure of FIT21 includes several titles addressing different aspects of digital asset regulation and innovation. Title I focuses on definitions, rulemaking, and the notice of intent to register, providing clarity on key terms under various laws and outlining the process for entities to file notices of intent to register as digital commodity exchanges, brokers, dealers, and intermediaries.
Title II delves into the clarity for assets offered as part of an investment contract, while Title III outlines regulatory requirements for offering and selling digital assets, including enhanced disclosure mandates. Title IV covers the registration requirements for digital asset intermediaries at the SEC, including operational requirements and conflict of interest rules.
Title V addresses the registration for digital asset intermediaries at the CFTC, while Title VI emphasizes innovation and technology improvements within the digital asset ecosystem. The bill also mandates studies on foreign adversary participation in the digital asset market to safeguard against potential risks.
With the U.S. House of Representatives passing FIT21, the bill will now move to the U.S. Senate for consideration. With strong bipartisan support in the House, it is anticipated that the Senate will also support and pass the bill in the near future, signaling a significant step forward for the regulation of digital assets in the United States.