Lawmakers from the United States House Financial Services Committee have unveiled significant progress in their efforts to advance the Financial Innovation and Technology for the 21st Century Act (FIT21), marking a crucial milestone in the regulation of digital assets.

Chairman Patrick McHenry announced on May 10 that the committee is gearing up for a full floor vote on the FIT21 bill, indicating that the entire chamber could potentially vote on the legislation "later this month," pending deliberations in the House Committee on Rules. The FIT21 bill, which received committee approval in July 2023, aims to provide clarity on the regulatory roles of the U.S. Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in overseeing digital assets.

Representative French Hill expressed satisfaction with the progress, emphasizing the necessity for a robust regulatory framework in light of recent events such as the collapse of FTX. Hill stressed the importance of strong consumer protections and effective regulation to safeguard investors and consumers while positioning America as a leader in blockchain innovation.

Republican lawmakers underscored the significance of the FIT21 bill, highlighting its provisions to grant the CFTC expanded authority over digital commodities and clarify the SEC's jurisdiction over cryptocurrencies. This announcement followed a bipartisan House vote in favor of a resolution to repeal an SEC accounting rule pertaining to crypto, which was criticized for its restrictive impact on banks.

However, the bill's passage in the House remains uncertain, as it would necessitate support from both chambers of Congress and the signature of President Joe Biden. Representative McHenry acknowledged the bipartisan nature of the bill's advancement but emphasized the need for further legislative steps.

Sheila Warren, CEO of the Crypto Council for Innovation, welcomed the progress on FIT21, acknowledging that while the bill may not be flawless, it represents a critical stride towards establishing a federal regulatory framework for digital assets in the United States.

Against the backdrop of an election year, the regulation of digital assets has emerged as a significant campaign issue, with various lawmakers advocating for increased oversight. Cryptocurrency exchange Coinbase's Stand With Crypto initiative has even launched a political action committee to support pro-crypto candidates in the upcoming 2024 elections. Representative McHenry's announcement in December that he does not intend to seek reelection adds an additional layer of complexity to the legislative landscape.