What exactly does the US crypto bill mean?

FIT21 seeks to ensure a regulatory environment that allows blockchain technology to flourish in a way that protects US markets and consumers. More specifically, the FIT21 Act/HR 4763 establishes a regulatory framework for the US digital asset market in order to:

· Address the unique structure of digital assets—thereby supporting the unique needs of new technologies and their opportunities;

· Provide clear, strong consumer protections—thereby supporting the goals of protecting consumers while promoting innovation;

· Clarify which digital assets are regulated by the Commodity Futures Trading Commission (CFTC) and which are regulated by the Securities and Exchange Commission (SEC). This is important because there are key differences between the definitions of "commodities" and "securities" that have an impact on how they are regulated. Specifically:

The CFTC will regulate digital assets as commodities "if the blockchain or digital ledger on which they operate is functional and decentralized."

The SEC will regulate digital assets as securities "if the relevant blockchain is functional but not decentralized."

The bill defines decentralization as “if, among other requirements, no person has unilateral power to control the blockchain or its use, and no issuer or associated person controls 20% or more of the digital assets or voting power in the digital assets.”

The bill also imposes other consumer protection requirements, such as segregation of customer funds; lockup periods for token insiders (to incentivize innovation rather than just speculation); annual sales volume limits; and disclosure requirements. These are not unlike the protective regulators put in place after the Great Depression, the excesses of the 1920s, and the stock market crash of 1929 — and once these guidelines were in place, America’s markets and economy enjoyed an unprecedented era of growth and innovation.