Why is the FIT21 cryptocurrency bill a watershed moment for the industry?

Author: Kristin Smith, CoinDesk; Compiler: Deng Tong, Golden Finance

The passage of the 21st Century Financial Innovation and Technology Act (FIT21) by the U.S. House of Representatives is an important milestone for the digital asset industry. As the head of the Blockchain Association, the leading trade organization representing the industry, I am pleased to see strong bipartisan support for trying to establish clear rules that are designed to enable responsible innovation while protecting consumers.

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A Quick Overview of the Main Contents of the Latest U.S. Cryptocurrency Bill FIT21

A16z: Detailed Explanation of the FIT21 Act Why It Is Important to the Cryptocurrency Industry

For a long time, the regulatory environment for digital assets in the United States has been an untenable and chaotic situation. Different federal agencies have claimed conflicting jurisdictions, causing market confusion and uncertainty. Meanwhile, the Securities and Exchange Commission (SEC) has taken advantage of this unstable situation to step up its intimidation and enforcement efforts, threatening the viability of cryptocurrency in the United States. This has led to further uncertainty, costly legal battles, and the risk that the United States will lag behind other regions, such as the European Union, in fostering a vibrant, homegrown cryptocurrency industry. The status quo in cryptocurrency regulation in the United States simply isn’t working for anyone—not for companies developing innovative products and services, not for investors, and certainly not for consumers. It’s time for Congress to step in, reclaim its rightful place as the engine of economic policymaking, and draft a modern, fit-for-purpose regulatory framework.

While the legislation should be further refined by the time it reaches the Senate, FIT21 represents a notable step in the right direction. It recognizes the fundamental promise of cryptocurrency and blockchain technology and works to foster innovation while protecting consumers. This legislative approach that balances these key priorities is exactly what our industry has been advocating for. It’s also what consumers are asking for.

We applaud House Financial Services Committee Chairman Patrick McHenry (R-NC) and House Agriculture Committee Chairman Glenn Thompson (R-PA) for their efforts to lead this legislation. They invested months of work and continued engagement with industry stakeholders, including Blockchain Association member companies, to understand the key issues and try to establish the right framework.

While FIT21 is not perfect—no bill is—we will continue to advocate for productive change. Today’s vote represents undeniable progress on the path toward a sensible policy environment that brings transparency to digital assets in the United States. After a difficult 2022, it is gratifying to see elected leaders support this critical technology, which more and more Americans want their government to support or at least not hinder.

The House vote reaffirms the growing political momentum for cryptocurrency, following positive developments such as the recent bipartisan congressional repeal of SAB121, the SEC’s misleading and illegal accounting guidance. A recent poll shows that a growing faction of American voters wants to elect politicians who understand cryptocurrency and are willing to respect and support the technology’s growth in the United States.

Cryptocurrency is likely to become a hot-button issue in the upcoming presidential campaign, with former President Trump recently embracing the technology and making a clear case for support.

As FIT21 moves to the Senate floor, the Blockchain Association and our members will continue to engage constructively to advocate for smart policies that promote responsible innovation and, most importantly, protect consumers. We express our sincere gratitude to House leaders for leading this watershed moment—and we look forward to maintaining cryptocurrency’s extraordinary political momentum in the months ahead.