Chairman Patrick McHenry of the House Financial Services Committee announced that legislation designed to provide clearer regulatory oversight for the crypto industry is potentially heading for a House floor vote by the end of May.

The proposed legislation, known as the Financial Innovation and Technology for the 21st Century (FIT21) Act, aims to establish precise regulatory frameworks for digital assets, tackling longstanding issues related to market oversight and consumer protection.

McHenry emphasized the importance of giving this "much-needed legislation the floor time it deserves," citing the prolonged regulatory uncertainty in the U.S. digital asset ecosystem as a hindrance to innovation and consumer safety.

Sheila Warren, CEO of the Crypto Council, indicated that consideration of the legislation is slated for the week of May 20.

The House Committee on Rules, consisting of nine Republicans and four Democrats, is expected to review the legislation under a "structured rule," determining which amendments can be considered and setting debate time limits.

The committee will decide whether FIT21 should proceed to a floor vote by the end of May, after which the bill must navigate through the Senate and gain presidential approval.

FIT21 delineates the Commodity Futures Trading Commission (CFTC) jurisdiction over crypto commodities and the Securities and Exchange Commission (SEC) jurisdiction over crypto offered as investment contracts.

The legislation aims to establish clear boundaries between the SEC and CFTC, potentially addressing controversies stemming from the SEC's enforcement actions in the crypto space.

This distinction intends to provide clarity for crypto developers regarding fundraising methods and regulatory oversight.

FIT21 also introduces a process for secondary market trading of crypto commodities initially offered through investment contracts.

Furthermore, the bill imposes registration requirements on companies with the SEC and CFTC, mandating customer disclosure, asset safeguarding, and operational standards.

Introduced by Chairman Glenn Thompson of the House Committee on Agriculture, Whip Tom Emmer, and Representatives French Hill, Dusty Johnson, and Warren Davidson in July 2023, FIT21 represents a concerted effort to bring clarity and regulatory certainty to the crypto industry.