With Bitcoin rocketing in value and Wall Street circling like a hawk, the US crypto industry is holding its breath as a crucial vote approaches in Washington next week. The Financial Innovation and Technology for the 21st Century Act, or Fit21, could reshape the regulatory landscape for digital assets, potentially welcoming the industry into the fold or slamming the brakes on its recent growth spurt.
Fit21: A Lifeline Or A Leash?
Fit21 proposes a major shift in how the US government handles digital currencies. Currently, the regulatory landscape is fragmented, with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) both having a say.
Fit21 would establish the CFTC as the primary regulator for crypto, giving the industry a clearer picture of the rules it needs to follow. The bill would also set up guardrails to protect consumers from risky behavior and establish protocols for how these assets are held and treated in bankruptcy proceedings.
The bicoin industry has thrown its weight behind Fit21, calling it “crucial” for the future of the US digital asset market. The lack of clear regulations has been a major sticking point for the industry, with some companies even threatening to abandon the US altogether.
The Crypto Council for Innovation worries that the US is falling behind other countries in embracing bitcoin innovation. In an open letter to lawmakers, it argued:
“By passing this legislation, we can accelerate the growth of blockchain technology and digital assets, fostering financial inclusion and protecting national security.”
Wall Street Enters The Crypto Fray
Adding another layer of intrigue to the upcoming vote is the recent entry of Wall Street giants into the crypto space. The approval of a wave of Bitcoin exchange-traded funds (ETFs) in January has opened the door for Wall Street to get a piece of the crypto pie.
These ETFs allow traditional investors to invest in Bitcoin without having to directly buy and hold the cryptocurrency themselves. The potential for hefty fees associated with custody of these ETFs has some industry observers worried that Wall Street’s involvement could stifle innovation.
Will Bitcoin Find A Home In The US?
With the price of Bitcoin on the rise and pressure mounting from both the digital asset industry and Wall Street, the upcoming vote on Fit21 is a watershed moment for cryptocurrencies in the US. If passed, the bill could usher in a new era of regulatory clarity and foster the growth of the industry.
However, if the bill is defeated, the future of crypto in the US remains uncertain, potentially leading to an exodus of crypto companies and hampering innovation. With 10 days left until the vote, all eyes are on Washington as lawmakers decide whether to welcome crypto with open arms or keep it at bay.
Featured image from Getty Images, chart from TradingView