According to PANews, the US House of Representatives has officially passed the Financial Innovation and Technology Act of the 21st Century, also known as FIT 21. The proposal, led by the Republican Party, received support from many Democrats, leading to its approval.
The primary mission of the FIT 21 proposal is to define which aspects of cryptocurrency regulation fall under the jurisdiction of the Securities and Exchange Commission (SEC) and which are under the Commodity Futures Trading Commission (CFTC). In the past, the dual regulation of cryptocurrencies by both the SEC and CFTC has been a pain point in the US, with the two departments' stringent oversight and apparent competition for regulatory authority.
This development is a relief for many project parties. The SEC, with its 5,000 employees, is known for stricter management, while the CFTC, with only 700 employees, is seen as more lenient. Project parties would prefer to be classified as commodities rather than securities.
The FIT 21 proposal suggests that the classification should be based on whether the project party has direct control and whether the project party holds tokens/voting rights exceeding 20%. This approach could encourage project parties to move towards decentralization.
Many current projects claim to follow a three-step process: starting with centralization, introducing community governance in the growth phase, and finally achieving complete decentralization. However, many projects remain in the first phase. If the FIT 21 proposal is fully approved, it could potentially stimulate the development of meaningful decentralized applications.
The bill has passed the House of Representatives and is now awaiting the Senate's decision. The White House has not shown favor towards the proposal, but President Biden has not directly vetoed it. The chairman of the SEC also disagrees with the proposal.
The FIT 21 proposal also includes some noteworthy details. For instance, it suggests that as a commodity, public fundraising can be conducted with a few requirements: a valuation below $75 million and retail participation less than 10%. The proposal also emphasizes the opportunity for the next generation of the internet to be designed by Americans.