2024

In the coming weeks, that is, by the end of this month, the House of Representatives are going to vote on a major bill, HR 4763, also known as Financial Innovation and Technology for the 21st Century Act, abbreviated as FIT21. This bill is expected to bring clarity for regulating crypto industry in the U.S.
The House Committee on Financial Services, a body that governs the SEC and the House Committee on Agriculture, a body that governs the CFTC, have various inputs from the industry and have put in joint efforts to build the FIT21 bill.&nbsp;
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 This week, the House votes on our bipartisan bill with <a href="https://twitter.com/FinancialCmte?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">@FinancialCmte</a>, FIT21. <a href="https://twitter.com/hashtag/FIT21?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#FIT21</a> provides consumer protections &amp; regulatory clarity needed for the digital asset ecosystem to thrive in the US—cementing American leadership &amp; reinforcing our role as an innovation hub. <a href="https://twitter.com/hashtag/crypto?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#crypto</a>— House Committee on Agriculture (@HouseAgGOP) <a href="https://twitter.com/HouseAgGOP/status/1792706112086745529?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">May 20, 2024</a>
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In July 2023, the bill was passed out of the Financial Services Committee with the support of six Democrats and all Republicans on the committee. Moreover, it has received unanimous consent through the agricultural committees. It continues to get support from both parties since then.
The idea behind the proposed bill is not just to regulate the <a href="https://www.thecoinrepublic.com/2024/05/04/us-economic-events-to-impact-crypto-markets-a-weekly-setup/" target="_blank" rel="noopener noreferrer nofollow">crypto market</a> but also to bring clarity to the regulations rather than having confusing rules. It will build a clear path for business compliance and allow innovators to build trust and useful products for their users.
The next step is to get it passed by the Senate and signed by the president, Joe Biden, to become law.&nbsp;
<h2 class="wp-block-heading" id="strong-what-will-be-the-implications-if-fit21-becomes-a-law-strong">What will be the implications if FIT21 becomes a law?</h2>
The passing of the bill in the presidential office will have several implications for the crypto and blockchain industries. It will build a safety path for the blockchain projects in the USA and facilitate an effective launch of these projects. It will provide for clear and robust consumer protection.&nbsp;
It will also introduce other consumer protection requirements, such as segregation of customer funds; lock-up periods for token insiders, limitations on annual sales volumes and disclosure requirements.&nbsp;
Moreover, it will clarify and differentiate the role of the SEC and CFTC in regulating segments of the crypto industry. It will also clarify whether digital assets will be considered a security or commodity.
Lastly, it will ensure control over crypto exchanges and will also protect American consumers by imposing rules on crypto trading.
<h3 class="wp-block-heading" id="strong-differentiation-in-the-role-of-cftc-and-sec-strong">Differentiation in the role of CFTC and SEC</h3>
After the approval and implementation of the bill, the CFTC is supposed to regulate “digital assets as commodities.”. The underlying condition for the suggested treatment is that the blockchain or digital ledger on which it will run needs to be functional and decentralized.
On the contrary, the SEC would regulate “digital assets as securities.” The underlying condition for this treatment is that the associated blockchain needs to be functional and decentralized.&nbsp;
The bill defines decentralization for this purpose in such a way that no person or entity should have unilateral authority to control the blockchain or its applications and no issuer or affiliated person should have control over ~20% or more of the digital assets or the voting power of the digital assets.
<h3 class="wp-block-heading" id="strong-concerns-around-the-fit21-bill-strong">Concerns Around the FIT21 Bill</h3>
Some of the industry experts have raised their concerns, stating the bill will provide the SEC with too much jurisdiction by giving very high criteria for the consideration of decentralization and the ability to pull back any tokens or projects that experience an increase in centralization.
However, the proposed bill does not provide any clarity on the raised concerns. As of now, the bill is only aimed at providing the required regulatory certainty for the functioning and building of innovations in the crypto landscape.

Expected Approval Of FIT21 Bill, Significant Move In Crypto Space

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Thecoinrepublic.com

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