The process of implementing the Financial Innovation and Technology for the 21st Century Act (FIT21) may be a time-consuming endeavor, potentially requiring extensive coordination among US regulators before the rules come into effect.
During a panel at the 2024 Consensus event, Summer Mersinger, Commissioner of the Commodity Futures Trading Commission (CFTC), predicted a slow regulatory process for the bill if it becomes law. Mersinger pointed out that if legislation takes a long time to pass, rulemaking also takes a considerable amount of time. She cited the example of the incomplete Dodd-Frank rules to highlight the length of the process. Mersinger emphasized that the duration of the process would depend on how Congress passes the legislation.
Once a bill becomes law, regulatory bodies like the Securities and Exchange Commission (SEC) and CFTC will be responsible for enforcing the new rules. This involves drafting detailed regulations, allowing for a public comment period, and potentially making revisions based on feedback received. This phase can extend over several months or even years, as seen with the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in 2010.
The FIT2 bill has successfully passed the House of Representatives with bipartisan support and is now facing its next challenges in the Senate. This legislation aims to clarify regulatory responsibilities between the SEC and CFTC regarding digital assets.
The administration of Joe Biden has expressed concerns about the bill, hinting at possible regulatory gaps that could impact market stability. However, it has not explicitly stated whether a veto would be considered.
During the event discussion, SEC Commissioner Hester Pierce also participated and mentioned that Congress’ interest in cryptocurrency legislation is a response to the agency’s enforcement approach towards crypto firms. Pierce welcomed Congress’ interest in cryptocurrency and emphasized that it serves as a reminder that the SEC has not fully utilized the flexibility granted by Congress to address the application of the law to new and challenging aspects of the industry.
Image: [Image Description: Nick De, Summer Mersinger, and Hester Pierce at Consensus 2024.] Source: Turner Wright/Cointelegraph
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