US Passes FIT21 Act To OFfer Clarity On Crypto Regulations: Here's What It Brings To The Table

Under the FIT21 bill, oversight of the digital assets industry will be divided between the CFTC and the SEC.

The passage of the FIT21 bill has been met with widespread acclaim from stakeholders within the US crypto industry. ( Image Source :Getty )

United States lawmakers have united to approve a significant piece of legislation concerning cryptocurrencies. The bill, known as the Financial Innovation and Technology for the 21st Century Act (FIT21), received a favourable vote from 279 members of the US House of Representatives on May 22. This legislative milestone underscores the growing recognition of the need for regulatory oversight in the rapidly evolving realm of digital assets.

With this move, the United States joins a cohort of nations, including India, Japan, and South Korea, that are actively addressing the challenges posed by the burgeoning crypto sector. The FIT21 bill aims to provide clarity on regulatory jurisdiction within the crypto space, striking a balance between ensuring security and fostering innovation.

Clear Differentiation Between Asset Categories

One of the key provisions of the FIT21 bill is the establishment of clear definitions for different categories of crypto assets. By delineating which assets fall under the purview of securities regulations, the legislation seeks to prevent potential conflicts between crypto exchanges and regulatory bodies such as the Securities and Exchange Commission (SEC). This delineation is expected to mitigate regulatory uncertainty and foster a more conducive environment for the growth of the crypto industry.

Under the FIT21 bill, oversight of the digital assets industry will be divided between the Commodity Futures Trading Commission (CFTC) and the SEC. While both agencies will play a role in regulating the sector, the CFTC is anticipated to take on a more prominent role compared to the SEC. This shift reflects a growing recognition of the unique challenges posed by cryptocurrencies and the need for tailored regulatory frameworks.

Oppositiong From Several Ends

Despite the bipartisan support for the FIT21 bill, it has faced opposition from some quarters. Gary Gensler, the chair of the SEC, has voiced concerns about the legislation, citing the crypto industry's history of fraud and non-compliance with existing regulations. However, proponents of the bill argue that clear regulatory guidelines are essential for fostering responsible innovation and protecting investors.

The passage of the FIT21 bill has been met with widespread acclaim from stakeholders within the US crypto industry. Industry leaders, including Brian Armstrong, the CEO of Coinbase, have hailed the vote as a historic moment that heralds a new era of legitimacy and recognition for cryptocurrencies.

With the approval of the FIT21 bill by the House of Representatives, the legislation will now proceed to the Senate for further consideration. If approved by the Senate, the bill will then be signed into law, marking a significant step forward in the regulation of the crypto sector in the United States.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.