Implementing the Financial Innovation and Technology for the 21st Century Act (FIT21) could be a lengthy process, potentially requiring months or even years of coordination between United States regulators before rules go into effect.
Summer Mersinger, Commissioner of the Commodity Futures Trading Commission (CFTC), made the prediction during a panel at the 2024 Consensus event. Mersinger sees a slow regulatory process for the bill if it becomes law.
“If you think legislation takes a long time, rulemaking takes a long time, too. And some of the Dodd-Frank rules we’re not even done,” said Mersinger, adding that the process’ length would depend on how Congress passes the legislation. She continued:
“Rulemaking is a slow, slow process. And you think the law is signed in, the president signs it, it’s all done. That’s just step one. And then it really gets to the kind of where the rubber meets the road. So, it could take a while to get the rules done.”
After a bill becomes law, regulatory bodies like the Securities and Exchange Commission (SEC) and CFTC must enforce the new rules. It involves drafting detailed regulations, a public comment period, and possibly more revisions based on feedback received. This phase can extend over several months or even years, as in the case of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 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. The legislation clarifies regulatory responsibilities between the SEC and CFTC regarding digital assets.
Joe Biden’s administration has expressed concerns about the bill, hinting at possible regulatory gaps that could affect market stability, though it has not explicitly stated whether a veto would be considered.
Also participating in the event discussion, SEC Commissioner Hester Pierce said Congress’ interest in crypto legislation is a response to the agency’s enforcement approach toward crypto firms.
“I think some of the reasons we are in this place is because Congress got sick of looking at the SEC doing what it was doing, which was not providing clarity to people.”
Congress taking an interest in crypto is great, Peirce said, adding that it’s also a reminder that the SEC has been failing to use the flexibility granted by Congress to think about “how the law should apply to difficult, new challenging things.”
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