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The Implications of the FIT21 Act on Bitcoin’s Future in the US

  • Exciting News: Potential Bipartisan Passage of FIT21 Act in US Senate!
  • Controversy: Some Industry Insiders Criticize FIT21 Act’s Impact on DeFi.

US regulations in the crypto space took a significant leap forward in May with the House of Representatives approving crucial bills like the US CBDC Anti-Surveillance State and the FIT21 Acts. 

One of these bills, the Financial Innovation and Technology for the 21st Century Act (FIT21 Act), has been touted by policymakers as a game-changer that could bring more clarity to the crypto industry. 

However, while the House approval was a milestone, the real challenge lies ahead in the US Senate, where a divided stance could pose a hurdle for the Act’s progression towards becoming law. 

Is the FIT21 Act on Track to Pass the US Senate?

Recent developments suggest there could be a shift in the Senate’s sentiment, as highlighted by Coinbase founder and CEO Brian Armstrong. In a recent X post, Armstrong revealed,

“I met with more than a dozen Democratic and Republican Senators in DC over the last 48 hours to discuss establishing clear guidelines for the crypto industry and ensuring consumer protection for crypto users.”

Armstrong’s optimism about the Act’s Senate prospects is evident. Reflecting on his meetings, he remarked, 

‘There’s significant bipartisan momentum in the Senate now that FIT21 has cleared the House. It’s inspiring to see the crypto community’s voice influencing the decision-makers.’

For those unfamiliar, the FIT21 Act aims to establish a regulatory framework for digital assets, with a significant role assigned to the CFTC (Commodity Futures Trading Commission). 

Despite its potential benefits, the Act has faced pushback from some corners of the crypto sphere. Critics argue that certain provisions within the Act may not be suitable for the DeFi sector. One X user commented,

“No, the bill is detrimental to DeFi. Let’s wait for further developments and aim for a more comprehensive solution.”

Concerns have also been raised regarding the KYC (Know Your Customer) requirements, seen by some as conflicting with DeFi’s privacy-centric ethos. 

However, proponents argue that the Act doesn’t target the DeFi space specifically. Reacting to the Act in late May, Hayden Adams, the founder and CEO of Uniswap, highlighted,

‘Recognizing the unique nature of DeFi and treating it accordingly is a positive step forward. This acknowledges the need for specialized considerations, a move similar to the EU’s approach with MiCA.’

The ball is now in the US Senate’s court, and only time will tell if the bill secures approval and eventually earns the president’s endorsement. The upcoming elections could also impact the timeline for this legislative process. 

Next: Understanding the Crypto Fear and Greed Index at 70 and Its Influence on BTC, ETH & SOL

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