What is the FIT21 Crypto Bill? Key Insight & More
The crypto industry has witnessed a big win in the US after the clearance of the FIT21 Crypto Bill. The House of Representatives has officially passed the FIT21 bill with a majority of voters in favor. This is the first time the regulators have stepped in to comply with the needs of the crypto industry. FIT21 crypto bill approval is the beginning of introducing fit-for-purpose rules for digital asset trading and registration.
In this blog, let us discuss the FIT21 Crypto Bill and how it will impact the crypto industry and investors.
What’s the FIT21 Crypto Bill?
FIT21 Crypto Bill stands for Financial Innovation and Technology for the 21st Century Act. This bill was introduced almost a year back, in July 2023, and had moved through Congress. FIT21 was presented to establish a clear framework for digital assets, which will overlook the regulation of crypto tokens or exchanges. More importantly, it will simplify the crypto regulation and look after the classification of the assets.
The key role of this bill is to define the roles and responsibilities of the Commodity Futures Reading Commission (CFTC) and Securities and Exchange Commission (SEC).
Keys Insights of The FIT21 Crypto Bill
Yesterday, on the 22nd of May, the House of Representatives gathered to vote for the FIT21 crypto bill, and the results have come in the favor of the crypto industry. The vote results were 279 to 136, where 279 favored the bill. More importantly, from the blue side, 71 members also favored the bill.
FIT21 passes the House 279 – 136
House Democrats voting in favor of this bill: 71.
That is a *huge* number of elected Democrats voting “no confidence” in the current SEC, and sending a message to the Biden administration that “anti-crypto” is a losing platform this year. pic.twitter.com/zmlD1VRQfF
— Jake Chervinsky (@jchervinsky) May 22, 2024
The bill has highlighted three important updates which make it a win-win situation for the crypto industry and the regulators, which are: –
- CFTC is officially the leading regulator of digital assets.
- The roles of the CFTC and SEC are clearly distinguished. As per the bill, the CTFC will only regulate those crypto assets that themselves or their associated blockchain networks are functional and decentralized. Similarly, the SEC will only regulate those crypto assets classified as securities if the blockchain is functional but not decentralized. More importantly, the bill has classified a definition of decentralization as no single entity controls more than 20% of the asset or its voting powers.
- Establishment of Consumer Protection
How FIT21 Crypto Bill Will Impact Crypto Users
Nancy Pelosi, former Speaker of the House Representative of California says
FIT21 is the first step to establishing a regulatory framework for digital assets – and it must be improved by working with the Senate and the Administration. While building a foundation for responsible innovation, we must take further action to strengthen guardrails for consumers, investors, and taxpayers
The biggest win for crypto users is the limitation of the SEC’s involvement in crypto-related affairs. SEC is known for its strictness in the crypto industry, especially the SEC Chair, Gary Gensler. Now, the SEC is limited in their authority over the crypto regulations, especially the exchanges that could help the crypto industry and its development. More importantly, the Ethereum Spot ETF decision will also see a positive impact because of the FIT21 crypto bill approval.
Now, the CFTC has more authority over crypto-related decisions, which is comparatively neutral for crypto. As a result, better crypto regulations might happen. However, it is just the beginning of the fair treatment of the crypto industry and much more positive developments and news are anticipated.
Also, Read Coinbase CEO Brian Armstrong Celebrates House Victory for Clear Crypto Regulation
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