The House Committee on Rules has announced the consideration of the Financial Innovation and Technology for the 21st Century (FIT21) Act, setting the stage for a crucial floor vote later this month.
The FIT21 Act aims to provide much-needed regulatory clarity for cryptocurrencies, a sector plagued by uncertainty that has hampered innovation and consumer protection.
SEC Jurisdiction Over Crypto Cut by New Law
The FIT21 Act represents a collaborative effort by the House Financial Services and Agriculture Committees, reflecting years of bipartisan work.
“For far too long, the US digital asset ecosystem has been plagued by regulatory uncertainty that has stifled innovation and left consumers unprotected,” said House Financial Services Committee Chairman Patrick McHenry (R-NC).
This comprehensive legislation will delineate the roles of the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC). The CFTC will gain new jurisdiction over crypto commodities, while the SEC’s authority will be clarified for cryptos offered as investment contracts. This bifurcation aims to bolster consumer protections and market oversight.
House Committee on Agriculture Chairman Glenn “GT” Thompson (R-PA) emphasized the dual benefits of consumer safety and market innovation.
“FIT21 is a regulatory foundation to safeguard consumers and investors but also propels American leadership in digital finance,” Thompson said.
The bill mandates robust disclosure requirements for crypto developers and customer-serving institutions. These entities must segregate customer funds from their own and provide detailed operational and ownership information, enhancing transparency and reducing conflicts of interest.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
The FIT21 Act also introduces a process for secondary market trading of crypto commodities initially offered as investment contracts. This measure supports crypto projects raising funds while ensuring regulatory compliance.
Congressman Dusty Johnson (R-SD) highlighted the urgency of this legislation, warning that without regulatory clarity, the U.S. risks losing its edge to countries with established digital asset regulations.
“It’s time to provide clarity and regulatory authority to the Commodity Futures Trading Commission and Securities Exchange Commission to provide customer protections and market oversight,” Johnson asserted.
As the FIT21 Act advances, it promises to cement America’s role as a leader in global digital finance, ensuring both innovation and protection within the cryptocurrency market.
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