As the value of Bitcoin soars and Wall Street circles like a hawk, the US crypto industry is holding its breath ahead of a crucial vote in Washington next week. The Financial Innovation and Technology for the 21st Century Act, or Fit21, could reshape the regulatory landscape for digital assets, potentially welcoming the industry into the fold or curbing its recent growth spurt.
Fit21: a lifebuoy or a leash?
Fit21 proposes a major change in the way the US government manages digital currencies. Currently, the regulatory landscape is fragmented, with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) both having a say.
Fit21 would make the CFTC the primary crypto regulator, giving the industry a clearer picture of the rules it must follow. The bill would also put in place safeguards to protect consumers from risky behavior and establish protocols for how these assets are held and treated in bankruptcy proceedings.
The bitcoin industry has backed Fit21, calling it “crucial” for the the future of the US digital asset market. The lack of clear regulation is a major sticking point for the sector, with some companies even threatening to abandon the United States altogether.
The Crypto Council for Innovation is concerned that the United States is lagging behind other countries in adopting Bitcoin innovation. In an open letter to lawmakers, he argued:
“By passing this legislation, we can accelerate the growth of blockchain technology and digital assets, furthering financial inclusion and protecting national security.”
Wall Street enters the crypto fray
The Wall Street giants’ recent entry into the crypto space adds another layer of intrigue to the upcoming vote. The approval of a wave of Bitcoin exchange-traded funds (ETFs) in January opened the door for Wall Street to get a piece of the crypto pie.
These ETFs allow traditional investors to invest in Bitcoin without having to directly purchase and hold the cryptocurrency themselves. The potential for high fees associated with custody of these ETFs has some industry observers concerned that Wall Street’s involvement could stifle innovation.
Will Bitcoin find its place in the United States?
With the Bitcoin price Facing growing momentum and growing pressure from the digital assets industry and Wall Street, the upcoming Fit21 vote is a watershed moment for cryptocurrencies in the United States. If passed, the bill could usher in a new era of regulatory clarity and foster industry growth.
However, if the bill is defeated, the future of crypto in the United States remains uncertain, which could lead to an exodus of crypto companies and hinder innovation. With 10 days until the vote, all eyes are on Washington as lawmakers decide whether to welcome crypto with open arms or keep it at bay.
Featured image from Getty Images, chart from TradingView
