As FIT21 progresses to the Senate, experts remain cautiously optimistic but anticipate potential amendments to the bill.

After receiving widespread bipartisan support in the US House of Representatives on Wednesday evening, the Financial Innovation and Technology for the 21st Century Act (FIT21) is moving to the Senate.

The bill advanced with backing from 71 House Democrats, including Representatives Nancy Pelosi (D-CA) and Josh Gottheimer (D-NJ). It passed with two amendments proposed by Representatives Brittany Pettersen (D-CO) and Ralph Norman (R-SC).

Norman’s amendment mandates a joint study by the Treasury Department, CFTC, and SEC to identify any digital asset businesses owned by "governments of foreign adversaries." Pettersen’s amendment expands the Bank Secrecy Act to include digital asset entities as "financial institutions" and orders a study to evaluate risks posed by centralized intermediaries in areas with less robust anti-money laundering enforcement.

With the recent passage of joint resolution 109 in the Senate, which could invalidate the SEC’s staff accounting bulletin (SAB) 121 if President Biden does not veto it, supporters of FIT21 are hopeful. Representative Wiley Nickel (D-NC) expressed optimism, noting strong bipartisan support for a regulatory structure for crypto.

Senators will now review the bill and propose amendments. Industry advocates believe the current version of FIT21 may not reach the president’s desk unchanged. Miller Whitehouse-Levine, CEO of the DeFi Education Fund, anticipates continued Senate revisions and emphasizes the need for protections and legal certainty for developers and users of decentralized networks.

Despite the support of 71 Democrats in the House, opposition is expected to lobby vigorously in the Senate. Representative Maxine Waters criticized the bill as deregulating the crypto industry and argued that the SEC should continue enforcing existing securities laws on crypto firms to prevent fraud.

SEC Chair Gary Gensler also opposed the bill, stating it would create regulatory gaps and undermine oversight of investment contracts, risking investors and capital markets.

The Senate has not yet scheduled a floor vote for FIT21.