The White House has announced its opposition to the Financial Innovation and Technology for the 21st Century Act (FIT 21), citing a lack of adequate investor protection. Despite the potential impact of the bill on new cryptocurrency legislation, the administration is calling for more comprehensive laws.

In a statement, the White House emphasized its readiness to collaborate with Congress to create a stronger legal framework for digital assets.

White House Disapproves FIT 21

The US administration has officially rejected the FIT 21 bill, which aims to overhaul the market rules for digital assets. The White House argued that the current draft does not provide enough safeguards for consumers and investors engaging in digital asset transactions.

“H.R. 4763, in its current form, fails to offer sufficient protections for consumers and investors,” the administration stated. This stance indicates a broader legislative approach, seeking to integrate all existing financial authorities into well-rounded legislation.

Unlike past instances where the White House has threatened to veto similar bills, the administration remains open to further discussions on FIT 21. This suggests a continuous effort to improve digital asset regulation, reinforcing the USA’s position in the global financial arena.

SEC Chair Gary Gensler's Concerns

Meanwhile, Gary Gensler, Chair of the Securities and Exchange Commission, also voiced strong criticism of the FIT 21 Act. He warned that the bill could introduce new regulatory loopholes in both the cryptocurrency and traditional financial markets. Gensler is particularly concerned that firms might avoid strict SEC regulations by claiming to be decentralized.

He cautioned that such a move could undo decades of progress in financial regulation and expose investors to greater risks.

Gensler also highlighted the danger of using self-certification to bypass securities laws, which could be exploited by bad actors for fraudulent purposes. His firm stance underscores the SEC's commitment to maintaining high standards of investor protection in the digital asset space.

In addition, former Treasury official Graham Steele criticized the bill, describing it as a weak regulatory framework for cryptocurrencies.

Conclusion

The White House’s opposition to FIT 21, combined with the SEC's concerns, underscores the need for more robust cryptocurrency regulations. While the administration is willing to work with Congress on this issue, it remains clear that any future legislation must prioritize consumer and investor protection to ensure the integrity and safety of the financial markets.