After months, if not years, of seeking Congressional action to regulate the $1.2 trillion cryptocurrency market, U.S. lawmakers in recent days have taken several steps to do just that. 

On July 27, Congress advanced the Financial Innovation and Technology for the 21st Century Act. The bill, which will clarify the regulatory framework for digital assets, advanced before two House committees in a step called markup – where committee members suggest changes to the bill text. 

“In a historical moment for the digital asset industry, both the House Agriculture and House Financial Services Committee voted to advance the Financial Innovation and Technology for the 21st Century Act,” Ji Kim, general counsel and head of global policy, digital assets for Crypto Council for Innovation, said in an interview.

“It was encouraging to see strong bipartisan support for the bill in both committees,” he said. “This reaffirms that crypto is gaining mainstream adoption and driving innovation across our economy.” He added, “It provides our industry with the regulatory clarity we have been seeking.” 

The crypto industry has been asking for regulatory clarity for some time. In its absence, and after major failures in 2022 at exchanges such as FTX and crypto credit firms like BlockFi and Celsius, the space has been in a tailspin, with regulatory uncertainty and fears of contagion risk paralyzing growth, innovation and consumer confidence. 

The bills are still a long way from becoming law. They have to make their way out of committee to a full House vote. If that passes the legislation goes to the Senate where changes are usually made; the two chambers then reconcile the differences before a final vote. After that, the bills must be signed into law by the President.

Kim said the House Financial Services Committee put personal views regarding crypto to the side in order to best focus on improving the status quo and was encouraged by the substantive discussions. A federal regulatory framework will provide clarity for all of the crypto industry as to how existing market regulations apply or do not apply to digital assets. 

A second piece of crypto legislation, the Clarity for Payment Stablecoins Act of 2023, was referred to the House Financial Services Committee on July 20. It would provide a clearer regulatory framework for stablecoins and  follows 15 months of bipartisan collaboration. 

The financial services committee also introduced on July 25 the Keep Your Coins Act, a bill to ensure consumers are allowed to maintain custody of their digital assets in self-hosted wallets. Additional movements this past week include the markup of the Blockchain Regulatory Certainty Act and the Financial Technology Protection Act of 2023.