Regulation
What is the FIT21 crypto invoice? Key information and more
The crypto industry saw a big victory in the United States after the FIT21 crypto bill was approved. The House of Representatives officially passed the FIT21 bill with a majority of voters in favor. This is the first time regulators have stepped in to comply with the needs of the crypto industry. The approval of the FIT21 crypto bill is the start of the introduction of suitable rules for the trading and registration of digital assets.
In this blog, let’s discuss the FIT21 crypto bill and its impact on the crypto industry and investors.
What is the FIT21 crypto invoice?
FIT21 Crypto Bill stands for Financial Innovation and Technology for the 21st Century Act. This bill was introduced almost a year ago, in July 2023, and was passed by Congress. FIT21 was presented to establish a clear framework for digital assets, which will ignore the regulation of tokens or crypto exchanges. More importantly, it will simplify the crypto regulation and ensure asset classification.
The key role of this bill is to define the roles and responsibilities of the Commodity Futures Reading Commission (CFTC) and the Securities and Exchange Commission (SEC).
Key points of the FIT21 crypto bill
Yesterday, May 22, the House of Representatives met to vote on the FIT21 crypto bill, and the results were in favor of the crypto industry. The vote results were 279 to 136, with 279 in favor of the bill. More importantly, on the blue side, 71 MPs were also in favor of the bill.
FIT21 passes the House 279 – 136 🎉
House Democrats voting in favor of this bill: 71.
This is a *huge* number of Democratic elected officials voting “no confidence” in the current SEC and sending a message to the Biden administration that “anti-crypto” is a platform loser this year. pic.twitter.com/zmlD1VRQfF
– Jake Chervinsky (@jchervinsky) May 22, 2024
The bill highlighted three important updates that make it a win-win situation for the crypto industry and regulators, namely:-
- The CFTC is officially the primary regulator of digital assets.
- The roles of the CFTC and the SEC are clearly distinct. Under the bill, the CTFC will only regulate crypto assets that themselves or their associated blockchain networks are functional and decentralized. Likewise, the SEC will only regulate crypto assets classified as securities if the blockchain is functional but not decentralized. Most importantly, the bill classified a definition of decentralization as no entity controlling more than 20% of the assets or its voting rights.
- Implementation of consumer protection
How the FIT21 crypto bill will impact crypto users
Nancy Pelosi, former Speaker of the California House of Representatives, says
FIT21 is the first step toward establishing a regulatory framework for digital assets – and it must be improved by working with the Senate and the Administration. While laying the foundation for responsible innovation, we must take additional steps to strengthen safeguards for consumers, investors and taxpayers.
The biggest win for crypto users is limiting the SEC’s involvement in crypto-related matters. The SEC is known for its rigor in the crypto industry, particularly the SEC Chairmanship, Gary Gensler. Now, the SEC is limited in its authority over crypto regulation, particularly over exchanges that could help the crypto industry and its development. More importantly, the Ethereum Spot ETF The decision will also have a positive impact due to the approval of the FIT21 crypto bill.
Now the CFTC has more authority over crypto-related decisions, which is relatively crypto-neutral. As a result, better crypto regulations could be put in place. However, this is just the beginning of fair treatment of the crypto industry and much more positive developments and news are expected.
Also read Coinbase CEO Brian Armstrong Celebrates House Victory for Clear Crypto Regulation