The US House of Representatives has moved forward with cryptocurrency regulation plans, voting heavily in favour of the Financial Innovation and Technology for the 21st Century Act.
Both Republicans and Democrats supported the legislation, despite some reservations coming from US President Joe Biden. The legislation passed with 208 republicans and 71 Democrats supporting for a total of 279 votes, with 136 opposed, divided between three Republicans and 133 Democrats.
What is FIT21?
The Financial Innovation and Technology for the 21st Century Act, abbreviated as FIT21, introduced to the House of Representatives by Glenn Thompson, a Republican representative from Pennsylvania and a member of the House Financial Services Committee.
FIT21 has three core objectives – protecting customers by strengthening transparency and accountability with market participants, strengthening the market by protecting digital asset projects and protecting digital asset customer-serving institutions.
Should it pass through Congress, the bill will give the Commodity Futures Trading Commission jurisdiction over digital commodities. It also seeks to clarify the Security and Exchange Commission’s jurisdiction over digital assets as part of an investment contract.
On consumer protection, FIT21 seeks to provide accurate information relating to digital asset operations, ownership and structure to developers. Requirements will also come in for digital asset customer-serving institutions, such as to provide disclosures to customers, segregate customer funds from their own and reduce conflicts of interest through registration.
Patrick McHenry, Chairman of the House Financial Services Committee, said: “Today, the House took a historic step by passing FIT21 with broad, bipartisan support. FIT21 provides the regulatory clarity and robust consumer protections necessary for the digital asset ecosystem to thrive in the United States.
“The bill also ensures America leads the financial system of the future and remains a hub for technological innovation. I appreciate the partnership of Chairman Thompson, as well as Congressman French Hill and Dusty Johnson.
“This landmark initiative would not be possible without their steadfast leadership. The overwhelming support for FIT21 in the House should serve as a wakeup call to the Senate and this Administration. They must come to the table to ensure the Americans who engage with digital assets can do so safely.”
Why should gambling pay attention?
The legislation comes at a time of not only heightened value for cryptocurrency but also consistency in the crypto gambling sector. Although in many cases a regulatory grey area, crypto remains a popular method of payment for many players.
For example, a recent report from SOFTSWISS outlined that crypto bet sums grew by 20% year-over-year and 2.4% quarter-over-quarter during Q1 2024. Bitcoin accounted for 58.4% of wagers and Ethereum accounted for 17.2%.
Without naming any particular companies, SOFTSWISS asserted that 25% of online igaming operators now provide crypto betting. Of all the total bet sum, the firm found that 24% of wagers were made in crypto, with the remaining 75.6% in fiat.
Gambling firms operate in a time of accelerating developments in payments – Open Banking, instant payments, digital wallets, biometric and AI-based ID, for example, are all payments innovations affecting the gambling space.
As operators seek to differentiate products from the competition, offering as broad a range of payment methods as possible could prove valuable in setting up USPs. Operators with interests in crypto should pay close attention to the more mainstream legislative and regulatory adoption of crypto, seen this week in the US.
This is not to say that all US policymakers are onboard, however. As noted above, Joe Biden has some reservations about cryptocurrency and about FIT24 in particular, and Gary Gensler, Chair of the SEC, has openly criticised the legislation.
