The U.S. House of Representatives has passed the Financial Innovation and Technology for the 21st Century Act (FIT21), a bill that provides legal clarity on the classification, registration, and custody of crypto assets. The legislation, which received broad bipartisan support, is seen as a significant step towards clear rules for digital asset trading and registration.

The bill includes an interim oversight process for digital asset firms, allowing them to file a 'notice of intent to register' with federal regulators as the industry's regulatory responsibilities are finalized. It also clarifies which digital assets should be regulated by the Securities and Exchange Commission (SEC) versus the Commodities and Futures Trading Commission (CFTC).

Despite criticism from some Democrats and SEC chairman Gary Gensler, a significant number of Democrats supported the bill, arguing it is a good step towards keeping pace with rivals on crypto regulation and progress. The Biden administration, while initially opposing FIT21, has indicated it will work with Congress on a comprehensive regulatory framework for digital assets and has not signaled intent to veto the bill.

This development is a positive sign for the crypto industry, including DeFi and BRC 20, as it provides much-needed regulatory clarity, fostering a more conducive environment for growth and innovation.