The FIT21 Act aims to establish a regulatory framework for digital assets, overseen by the CFTC.
The Act faces opposition from DeFi proponents due to its KYC provisions, seen as conflicting with DeFi’s core values.
The FIT21 Act’s future depends on Senate approval and may be influenced by the upcoming US elections.
The US Senate is showing signs of support for the FIT21 Act, which seeks to create a regulatory framework for digital assets. This legislation aims to give the Commodities Futures Trading Commission (CFTC) authority over vital aspects of regulating digital assets.
I met with more than a dozen Dem and GOP Senators in DC over the last 48 hrs to discuss creating clear rules for the crypto industry and consumer protection for crypto users. There’s strong bi-partisan momentum to get this done in the Senate now that FIT21 has passed in the… pic.twitter.com/KWVylw1kDL
— Brian Armstrong (@brian_armstrong) June 12, 2024
Even though some people are optimistic, the FIT21 Act is facing a lot of opposition in the crypto community, especially from people who support decentralized finance (DeFi).
The Know Your Customer (KYC) requirements of the Act goes against the principles of DeFi, which places an emphasis on personal freedom and privacy. Strict regulatory requirements threaten to weaken these principles and regulate innovation in the industry.
The CEO and founder of Uniswap, Hayden Adams, has expressed a more optimistic opinion of the FIT21 Act. Adams suggests the US government should adhere to the EU’s MiCA (Markets in Crypto-Assets) framework, which involves researching DeFi before passing extensive regulations. He claims that by taking this approach, regulations that support innovation and maintain market stability could become more balanced and informed.
The upcoming US elections may have an impact on the Act’s progress, which hangs on Senate approval. It is difficult to predict the final outcome due to the possibility of legislative delays and political shifts. The discussion surrounding the FIT21 Act highlights the necessity for a regulatory framework that strikes a balance between oversight, privacy and autonomy values of the DeFi community.
The cryptocurrency industry is currently engaged in an intense discussion over the FIT21 Act. Some, like Brian Armstrong, think it could get support from both parties, but others are worried about what it could mean for DeFi. The cryptocurrency community will be watching the legislative process and the effects of the Act with keen interest as election season approaches.
Read Also
Crypto Clarity or Chaos: House Passes FIT21 but Senate Showdown Looms
US House of Representatives Approve FIT21 Bill with Strong Bipartisan Support
SEC’s Chair Gary Gensler Opposes FIT21 Bill for Weakening Securities Laws
US House Democrats Not Whipped on Crucial Crypto Legislation
BNB Celebrating 5-Years of Service Provision to Users
The post FIT21 Act Advances in Senate, Divides Crypto Community Over Regulatory Provisions appeared first on Crypto News Land.