#USHouseMarketStructureDraft The U.S. House of Representatives has passed the Financial Innovation and Technology for the 21st Century Act (FIT21), a comprehensive bill aimed at establishing a regulatory framework for digital assets. The legislation seeks to delineate the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in overseeing the crypto industry.

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๐Ÿงพ Key Provisions of FIT21

Regulatory Classification: The bill proposes that digital assets operating on a "functional and decentralized" blockchain be classified as commodities under the CFTC's jurisdiction. Conversely, assets on "functional but not decentralized" blockchains would fall under the SEC's purview as securities.

CFTC Empowerment: FIT21 aims to bolster the CFTC's authority by granting it additional resources to oversee crypto spot markets and digital commodities, particularly Bitcoin.

Secondary Market Trading: The legislation introduces a process to permit the secondary market trading of digital commodities initially offered as part of an investment contract.

Stablecoin and AML Provisions: The bill includes measures addressing stablecoins and anti-money laundering (AML) requirements.

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๐Ÿ—ณ๏ธ Legislative Process and Outlook

FIT21 passed the House with a bipartisan vote of 279-136. However, its prospects in the Senate remain uncertain. Investment bank TD Cowen notes that the bill has "no chance" of becoming law in the current Congress but could lay the groundwork for future legislative efforts.

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โš ๏ธ Criticisms and Concerns

Regulatory Gaps: SEC Chair Gary Gensler argues that FIT21 could create new regulatory gaps and undermine established precedents for overseeing investment contracts.

Resource Constraints: Critics, including Rep. Maxine Waters, express concern that the CFTC may lack sufficient resources to effectively regulate the crypto industry under the proposed framework.