FIT21 focuses on cutting the dominance of big crypto companies and increasing participation in the wider market.
This comprehensive crypto regulatory framework is required to progress innovation in the United States. The House Republicans have introduced a new Digital Asset Market Structure Discussion Draft on May 5. The draft is focused on cutting the dominance of big crypto companies and increasing participation in the wider market, according to an official from Paradigm.
Glenn Thompson and French Hill, the House agricultural and financial services committee, led the discussion draft. And, the vice president of regulatory affairs, Justin Slaughter, called it the Financial Innovation and Technology for the 21st Century Act (FIT21).
As per the draft, anyone possessing over 1% of a digital commodity issued by the project and less than 5% in the FIT21 bill will be referred to as an affiliated person. The officials mention that this initiative may reduce the influence of big crypto firms and result in increased participation in the crypto market.
FIT21 to Abolish Crypto Monopolies
The draft further mentions that a mature blockchain system, together with its associated digital commodity, does not come under the common control of any person or group. The main authority will be the Securities and Exchange Commission for regulating activity on the crypto network till they become properly decentralized.
A finance trading protocol is something that permits users to indulge in a financial transaction in a self-directed manner. Protocols meeting these criteria do not need to register as digital commodity brokers or dealers.
The draft calls digital commodities investment contract assets to differentiate their treatment from stocks and other traditional assets as per the Howey test. Crypto firms will also get a way to generate funds under the SEC’s oversight.
They will also have a clean and clear process to register their digital commodities with the Commodity Futures Trading Commission. CFTC will be responsible for Joint rulemaking, procedures, or making guidelines associated with crypto asset delisting.
This comprehensive crypto regulatory framework is required to progress innovation in the United States, mainly through modernizing the financial infrastructure of US and strengthening the US dollar dominance.