Clarksville Times

The U.S. House of Representatives has passed H.R. 4763, the "Financial Innovation and Technology for the 21st Century Act" (FIT21), marking a significant moment for the digital asset ecosystem in the United States. The legislation aims to provide robust consumer protections and regulatory certainty to foster innovation in digital assets.

"Today, the House took a historic step by passing FIT21 with broad, bipartisan support," said Chairman Patrick McHenry (NC-10). "FIT21 provides the regulatory clarity and robust consumer protections necessary for the digital asset ecosystem to thrive in the United States. The bill also ensures America leads the financial system of the future and remains a hub for technological innovation."

Chairman Glenn "GT" Thompson (PA-15) emphasized the importance of clarity in digital assets: "Today's bipartisan passage of the Financial Innovation and Technology for the 21st Century Act is a significant milestone. It underscores efforts to establish a much-needed regulatory framework designed to protect consumers and investors while fostering American leadership in the digital asset space."

Rep. French Hill (AR-02) highlighted that FIT21 crafts a regulatory framework that protects consumers and investors while securing U.S. leadership in blockchain innovation: "As FTX’s collapse showed, we need a functional regulatory framework in place to create consumer protections that currently do not exist."

Rep. Dusty Johnson (R-SD) stressed that FIT21 brings stability and clarity to digital assets: "Without this bill, digital asset innovation will continue to be filled with uncertainty."

Introduced on July 20, 2023, by Chairman Glenn "GT" Thompson, Rep. French Hill, Rep. Dusty Johnson, Whip Tom Emmer, and Rep. Warren Davidson—with Chairman Patrick McHenry as a cosponsor—FIT21 establishes clear federal requirements over digital asset markets.

The legislation grants new jurisdiction over digital commodities to the Commodity Futures Trading Commission (CFTC) and clarifies the Securities and Exchange Commission’s (SEC) jurisdiction over digital assets offered as part of an investment contract. It also sets processes for secondary market trading of such commodities if initially offered as part of an investment contract.

FIT21 mandates comprehensive customer disclosure, asset safeguarding, and operational requirements on entities registered with either CFTC or SEC:

- Digital asset developers must provide accurate disclosures about their projects.

- Institutions like exchanges must offer appropriate customer disclosures, segregate customer funds from their own, and reduce conflicts of interest through registration.

By establishing these frameworks, FIT21 aims to protect consumers while reinforcing America's role as an innovation hub.