The world of cryptocurrency is evolving day by day. The circulating amount of the market has turned it into a huge industry with numerous projects and users. As the digital industry is advancing the need for appropriate laws to set boundaries and provide a safe platform for the users is necessary.
This has led to the passing of the “Financial Innovation and Technology for the 21st Century Act” (FIT21) bill by the U.S. House of Representatives. The bill is claimed to change the digital industry with numerous opportunities as well as restrictions.
The crypto industry recorded its biggest-ever U.S. policy win on 22 May 2024 when the House of Representatives passed a wide-reaching bill to initiate regulations for digital assets markets, recording a 279-136 vote that saw Democrats crossing party lines to support the bill.
What Is The FIT21 Crypto Bill?
FIT21 Crypto Bill is a new law that aims to create clear rules for digital currencies, making them a safer and more accepted part of the financial system. The law paves the way to a more stable and transparent digital financial world.
The legislation grants the Commodity Futures Trading Commission (CFTC) new jurisdiction over digital commodities and provides clear information about the Securities and Exchange Commission’s (SEC) jurisdiction over digital assets offered as part of an investment contract.
The Bill divides the supervision of digital assets between the CFTC for digital commodities and the SEC for restricted digital assets and the key requirement to be categorized as a digital commodity is some degree of decentralization.
Under the law, digital asset developers will be required to deliver precise, relevant disclosures, which include information relating to the digital asset project’s operation, ownership, and structure to the consumers and the digital assets customer-serving institutions, like exchanges, brokers, and dealers will be required to provide correct disclosures to customers to protect customer funds from their assets and minimize conflicts through registration, disclosure, and operational requirements.
The law also strengthens the market by protecting digital asset projects. The digital asset developers will have a pathway to raise funds and the participants will have a pre-set process to determine which digital asset transactions are under the SEC’s jurisdiction and the C FTC’s jurisdiction.
FIT21 will also protect digital asset customer-serving institutions by organizing clear lines between the SEC and CFTC and creating comprehensive registration authorities to permit them to lawfully serve customers in digital asset markets.
Opinions On FIT21
As the law has set boundaries for many aspects, there are different kinds of opinions on the matter. SEC chair Gary Gensler said FIT 21 “would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk,”
Coinbase CEO Brian Armstrong called FIT21 a “historic vote” that, if passed, the law will “finally start to create some clear rules to regulate crypto.”, “Americans want to know their representatives are protecting their rights to use crypto, creating clear rules to protect consumers, and won’t let the lack of clarity be weaponized by a few activists in the administration trying to unlawfully kill an industry”.
Coinbase has a history of seeking clearer crypto regulation and rules from the SEC for years and they have finally received an answer for it.
Congresswoman Maxime Waters also raised criticism, by highlighting that the CFTC was never designed to oversee retail investments. Once a digital asset is categorized as a digital commodity, the degree of oversight becomes rather limited, which might lighten the supervision load considering the number of resources to oversee it.
Conclusion
The FIT 21 Act is the latest congressional bill to create a permitted authority that would provide the regulatory clarity needed for a digital asset ecosystem to meaningfully develop in the United States.
The bill is said to change the future of the crypto currency laws making it a more secure and reliable source for finance.
Even though many personalities have criticized the bill pointing out its faults, the bill has numerous plans to make the crypto platform more accessible and secure from the scams of the market. Be updated in the crypto industry to know how the bill is going to impact the market.
