3 Things to Know About the FIT21 Bill

The FIT21 (Financial Innovation and Technology for the 21st Century) bill is the first regulatory framework for crypto in the US. This is a huge step forward in helping them catch up with other global jurisdictions that have already established crypto regulations.

Up until now, the US has been a challenging environment, to say the least, with many crypto teams choosing to relocate their headquarters elsewhere. However, FIT21 clarifies the rules for crypto companies and could encourage innovators because they’ll feel more supported and have some ground rules to work with.

So what are the most important things to know about the bill?

1. It’s being positioned as pro-crypto legislation. FIT21 addresses long-standing uncertainties and makes it easier for startups and established companies to develop new crypto-friendly products and services. Many are viewing it as a sign of a brighter future for crypto.
2. The approval of this bill suggests growing Democratic support for cryptocurrencies. Historically, and broadly speaking, Democrats have been more skeptical of crypto, while Republicans have been more supportive. This changing tide is positive news that will allow more capital to flow into the space.
3. Aspects of the bill have drawn concern from savvy investors. Some view it as a potential trojan horse—another power play to reduce self-custody. A point of concern is the strengthening of Know Your Customer (KYC) requirements for digital asset companies. These protocols diminish the anonymity that many in the crypto community value.

While the bill raises questions about the balance between regulatory compliance and the foundational principles of crypto, it’s nothing we haven’t heard before. And like I’ve said many times, we always have options with crypto.

There are projects and exchanges out there right now that are completely decentralised. You download the tools locally or run them on decentralised internet. These options can’t be shut down by anyone and they don’t require KYC protocols. This is true decentralisation.

FIT21 signals a change in narrative and an increase in support for the broader crypto industry. This is bullish news because it encourages more participation in the space and will pave the way for greater mainstream adoption.

Similar to the ETF’s, when we know what’s coming, we can position ourselves accordingly.