Financial Innovation and Technology for the 21st Century Act
Floor Speech
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Mr. THOMPSON of Pennsylvania. Mr. Chairman, I rise today in support of H.R. 4763, the Financial Innovation and Technology for the 21st Century Act, or FIT21, which establishes a regulatory framework for digital assets while protecting consumers and fostering innovation within the United States.
This legislation has been a long time coming. Since 2018, the House Committee on Agriculture has held numerous hearings, roundtables, and meetings and introduced multiple pieces of legislation to bring certainty and clarity to the digital asset markets.
For Congress to establish a comprehensive digital assets market framework, it was clear the House Committee on Agriculture and the House Committee on Financial Services needed to work in a collaborative manner.
Chairman McHenry and I first met nearly 2 years ago to discuss this ambitious plan, and together, we aimed to develop the best policies possible.
Over this Congress, members of both committees have engaged in robust and collaborative debates and educational sessions on current securities and commodities laws and regulations, as well as gaining a deeper understanding of the digital asset ecosystem.
Through this process, we learned several key points, including: that the current process to determine if a digital asset is a security or not is unclear, unworkable, and impractical; the Commodity Futures Trading Commission lacks essential regulatory authority over retail- serving intermediaries in the digital commodity spot market; and the treatment of customer assets held by intermediaries needs to be strengthened.
Mr. Chairman, my colleagues on the other side of the aisle have claimed that this bill will allow a substantial portion of crypto and some traditional securities to escape nearly all laws and regulations, operating without any primary regulator. That is far from the truth. The legislation before us today enhances existing securities and commodities regulations to create an appropriate framework for digital assets.
For example, a registered digital commodity exchange would follow regulations similar to those of the CFTC for derivatives exchanges, including monitoring trading activity, prohibiting abusive practices, reporting trading information, managing conflicts of interest, ensuring governance standards, upholding cybersecurity, and more.
Mr. Chairman, Congress has a historic opportunity to enact legislation that not only protects consumers but also ensures that the United States remains at the forefront of technical innovation.
By supporting FIT21, we can foster and create a safer, more transparent, and more competitive environment for digital assets.
Let us seize this moment to provide clear guidelines and robust protections, fostering a future where innovation can thrive responsibly within our borders.
Mr. Chairman, I urge all of my colleagues to support this bill.
Mr. Chairman, I understand that the gentlewoman from Washington State, the chair of the Energy and Commerce Committee, has a few questions for clarification.
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Mr. THOMPSON of Pennsylvania. Mr. Chairman, I yield to the gentlewoman for the purpose of a colloquy.
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Mr. THOMPSON of Pennsylvania. Mr. Chairman, the gentlewoman's understanding of the legislation is correct.
The intent of FIT21 is to draw jurisdictional lines between the SEC and the CFTC as it relates to certain spot digital asset transactions.
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Mr. THOMPSON of Pennsylvania. FIT21 provides the CFTC with exclusive jurisdiction over digital commodity spot market transactions that occur on or through entities registered with CFTC. FIT21 does not provide CFTC with the authority to directly regulate any transaction between two people which is not intermediated by an entity registered with the CFTC.
Separate from FIT21, CFTC has existing authority to police spot market commodities for fraud and market manipulation, which FIT21 does not change.
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