In a major victory for the crypto industry, the US House of Representatives has approved the Financial Innovation and Technology for the 21st Century Act (FIT21). With a bipartisan vote of 279-136, the bill marks the most significant legislative accomplishment for digital assets in Congress.

The passage of the FIT21 bill now shifts the crypto baton to the Senate, where prospects for decisive action remain uncertain. As of now, there is no counterpart bill in the Senate, and support for such legislation remains murky. Additionally, the necessary committees in the Senate have not conducted the same level of work on crypto as the House.

The approval of the bill is a milestone for the United States, which has been lagging behind other global jurisdictions in establishing comprehensive regulations for cryptocurrencies. Despite this win, the implementation of effective oversight is still a work in progress.

The strong showing of House Democrats in supporting the FIT21 bill is noteworthy, with several members crossing party lines to back the legislation. Representative Josh Gottheimer (D-N.J.) argued that the bill is "well-reasoned, thoughtful, bipartisan legislation," emphasizing the need for clear rules in the crypto space.

In the House vote, 71 Democrats and 208 Republicans voted in favor of the bill, while 133 Democrats and 3 Republicans voted against it. President Joe Biden opposed the bill through a policy statement, but he did not indicate any intention to veto it as he had done recently with a Securities and Exchange Commission (SEC) policy decision.

The FIT21 bill, primarily spearheaded by House Republicans, aims to establish a regulatory framework for the US crypto markets. It includes provisions for consumer protections, designates the Commodity Futures Trading Commission (CFTC) as the regulatory authority for digital assets, and clarifies the classification of cryptocurrencies as securities or commodities.

However, not all members supported the bill. Ranking Democrat on the House Financial Services Committee, Representative Maxine Waters (D-Calif.), raised concerns that the legislation could enable crypto businesses to evade securities laws. She argued that rewarding illegal activities by legalizing them would be detrimental.

During the House debate, several amendments were discussed, including changes proposed by Representatives Greg Casar (D-Texas), Brittany Pettersen (D-Colorado), Ralph Norman (R-South Carolina), and Scott Perry (R-Pennsylvania). Casar's amendment to limit a crowdfunding exemption to $5 million instead of $75 million was defeated, while the rest were adopted.

The future of the FIT21 bill now lies in the hands of the Senate, where further deliberations and negotiations are expected. As the United States strives to establish a robust regulatory framework for digital assets, the outcome in the Senate will significantly impact the future trajectory of the crypto industry.

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