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U.S. Contemplates Digital Asset Oversight Through FIT21

Key Takeaways
  • The Financial Innovation and Technology for the 21st Century Act is commonly referred to as FIT21
  • On May 10, House Financial Services Committee Chair Patrick McHenry revealed that the FIT21 bill could go for a vote of the full chamber around May mid-November
  • It should be noted that FIT21 seeks to strengthen regulatory agencies such as the SEC and CFTC with all-embracing oversight
11-May-2024 By: Sakshi Jain
U.S. Contemplates Di

FIT21, a New Era in the U.S. Regulatory Framework for Digital Assets

What’s the News

The Financial Innovation and Technology for the 21st Century Act or FIT21 has unfolded in the committee after which it may be subjected to a full plenary vote in the House of Representatives in the United States.  Through July 2023 act passed, U. S. officials give authority to the United States Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) and supervise the impact of digital currencies in the country.

On May 10, House Financial Services Committee Chair Patrick McHenry revealed that the FIT21 bill could go for a vote of the full chamber around May mid-November, presupposing that the Rules Committee won't veto the plan at this stage. As Representative French Hill pointed out, a well-controlled regulatory environment is of deep importance to ensure investors' safety while fostering the non-failure growth of blockchain technology.

According to the Republican lawmakers, the FIT21 should be a role delineation of SEC's regulator function for the cryptocurrencies and the CFTC indeed could have more influence over the commodities with digital features. The House passed a resolution to modify the SEC accounting rule that was perceived harmful to banks by a bipartisan vote that followed this proclamation. 

However, the matter is uncertain until today concerning FIT21 passing the vote successfully. Even though Representative McHenry lauded both parties for their effort in moving the proposal toward completion, legislation is yet to be passed, and the president’s signature, and approval of the Senate, are still required before the act can be finalized.

Sheila Warren, the CEO of the Crypto Council for Innovation remarked, that FIT21 represents a leap forward towards the formation of a federal digital assets regulatory framework in the United States. The stakeholders will now have an opportunity to study the latest wording of the bill that was changed since their first markups in July.

Impact of FIT21

The arrival of rules for digital assets called FIT21 by the United States has been agreed to be a significant step in developing a comprehensive framework. The bill's contents deal with the concerns that were raised by events of a somewhat recent nature like the collapse of FTX and provide a way to put in place protections for consumers more than that, there is much-needed clarification of the regulatory institutions. 

It should be noted that FIT21 seeks to strengthen regulatory agencies such as the SEC and CFTC with all-embracing oversight and management functions of the digital asset markets to regain investor trust and option blockchain innovation. However, the bill still needs more votes in the Senate and the House for it to become law which will complicate its approval.

Conclusion

Coin Gabbar reflects, that by campaigning on digital asset regulation and supervision, legislators are expressing their increased attention to this issue as the United States argument positions itself for the election season. One example of the initiative is Coinbase's Stand With Cryptocurrency PAC which is aimed at raising the level of awareness of cryptocurrencies among politicians. Hence, the actors think that the introduction of FIT21 would be a significant milestone toward developing such regulation and determining the US crypto market fate.

Also Read:  What’s Cooking In South Korea’s “Bitcoin Meal Boxes”?

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