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US House Set to Vote on Advanced Crypto Regulation Bill
The post US House Set to Vote on Advanced Crypto Regulation Bill appeared on BitcoinEthereumNews.com. The United States House of Representatives is about to vote on a piece of legislation – the Financial Innovation and Technology for the 21st Century Act (FIT21). The legislation could have significant ramifications for the blockchain industry. Also Read: Lummis and Gillibrand Draft New Stablecoin Regulation Bill The legislation aims to simplify the complex and often biased regulatory framework governing digital assets in the country, potentially setting a new standard for the crypto industry. In particular, FIT21 will establish a clearer division of regulatory responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Framework to Separate Crypto Securities From Commodities The essence of this bill largely depends on whether digital assets are classified as securities or commodities. The classification is important because it directly affects how cryptocurrencies are regulated. Under FIT21, if a digital asset operates on a blockchain that is both functional and decentralized, it would fall under the CFTC’s purview as a commodity. Conversely, if the blockchain is functional but not decentralized, the SEC would regulate the digital asset as a security. However, the bill has set a high bar for what constitutes decentralization. “The bill classifies a blockchain as decentralized if, among other requirements, no person has unilateral authority to control the blockchain or its usage, and no issuer or affiliated person has control of 20% or more of the digital asset or the voting power of the digital asset.” — FIT21 The bill stated that this definition is essential to prevent the centralization of power within the industry, which has been a point of concern for quite some time. Not Everyone Supports FIT21 S.E.C. Despite its potential benefits, FIT21 has not been without controversy. Some industry insiders argue that the decentralization criteria are too tight, potentially granting the SEC…
The post US House Set to Vote on Advanced Crypto Regulation Bill appeared on BitcoinEthereumNews.com.
The United States House of Representatives is about to vote on a piece of legislation – the Financial Innovation and Technology for the 21st Century Act (FIT21). The legislation could have significant ramifications for the blockchain industry. Also Read: Lummis and Gillibrand Draft New Stablecoin Regulation Bill The legislation aims to simplify the complex and often biased regulatory framework governing digital assets in the country, potentially setting a new standard for the crypto industry. In particular, FIT21 will establish a clearer division of regulatory responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Framework to Separate Crypto Securities From Commodities The essence of this bill largely depends on whether digital assets are classified as securities or commodities. The classification is important because it directly affects how cryptocurrencies are regulated. Under FIT21, if a digital asset operates on a blockchain that is both functional and decentralized, it would fall under the CFTC’s purview as a commodity. Conversely, if the blockchain is functional but not decentralized, the SEC would regulate the digital asset as a security. However, the bill has set a high bar for what constitutes decentralization. “The bill classifies a blockchain as decentralized if, among other requirements, no person has unilateral authority to control the blockchain or its usage, and no issuer or affiliated person has control of 20% or more of the digital asset or the voting power of the digital asset.” — FIT21 The bill stated that this definition is essential to prevent the centralization of power within the industry, which has been a point of concern for quite some time. Not Everyone Supports FIT21 S.E.C. Despite its potential benefits, FIT21 has not been without controversy. Some industry insiders argue that the decentralization criteria are too tight, potentially granting the SEC…
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