Financial Innovation and Technology for the 21st Century Act

Jul 20, 2023
Very pro-crypto


The Financial Innovation and Technology for the 21st Century Act (FIT21) is a comprehensive market structure bill that will protect consumers, promote national security, ensure crypto companies have robust rules, create clarity for job creators and blockchain builders, and the next generation of the Internet develops here.

FIT21 does four key things:

  1. Creates consistent consumer protection requirements: Ensures digital asset owners are protected by robust requirements for transparency, disclosure, segregation of funds and entities, protection of assets, and other measures under both the Securities and Exchange Commission (SEC) and Commodities Futures Trading Commision (CFTC).
  2. Provides new CFTC authority: Creates a much-needed, robust federal regulatory framework for the CFTC to oversee spot markets for digital asset commodities. This framework would fill an existing gap in federal oversight, and would lead to both more consistent consumer protection requirements across the country and enable more vigorous enforcement against bad actors. The bill is also consistent with calls from President Biden’s Financial Stability Oversight Council to ensure the CFTC can regulate digital asset commodities. Additionally, the CFTC will receive an increase in funding to adequately fulfill their oversight responsibilities.
  3. Modernizes SEC authority: Establishes workable registration requirements for digital asset trading platforms under the SEC jurisdiction, applying the same high standards for investor protection while also maintaining fair, orderly, and efficient markets and facilitating capital formation. It gives the SEC clear authority over certain digital assets that do not meet requirements to be regulated by the CFTC, thus enabling the SEC to allocate their limited resources to hold digital assets in their jurisdiction accountable.
  4. Creates a pathway for innovation: Constructs a fit-for-purpose registration pathway for developers, builders, and innovators that ensures appropriate regulation, including consumer and investor protection, at every step. The bill recognizes the unique characteristics of digital assets, which can evolve from a centralized project requiring the investor protections associated with securities to a decentralized project requiring consumer protections needed in commodities markets.
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