The Financial Innovation and Technology for the 21st Century Act Is a Watershed Moment for Our Industry

The passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) by the U.S. House of Representatives is a major milestone for the digital asset industry. As head of the Blockchain Association, the leading trade group representing this sector, I’m heartened to see such strong bipartisan support for attempting to codify clear rules that aim to enable responsible innovation while protecting consumers.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates. Kristin Smith is CEO of the Blockchain Association, the Washington DC-based trade association representing crypto.

For too long, the regulatory landscape for digital assets in the United States has been an untenable, muddled mess. Different federal agencies have asserted conflicting jurisdiction, creating confusion and uncertainty in the marketplace. Meanwhile, the U.S. Securities and Exchange Commission (SEC) has taken advantage of this precarious situation, supercharging a campaign of intimidation and enforcement that threatens the viability of crypto in the U.S.

This has led to further uncertainty, expensive legal battles and the risk of the U.S. falling behind other regions such as the European Union in fostering a vibrant, homegrown crypto landscape.

The status quo is simply not working for anyone – not companies building innovative new products and services, not investors, and certainly not consumers. It was time for Congress to step in, reclaim its rightful place as the engine room of economic policymaking, and draft a modern, fit-for-purpose regulatory framework.

While the legislation should be further refined as it moves to the Senate, FIT21 represents a notable step in the right direction. It acknowledges the fundamental promise of crypto and blockchain technology and endeavors to promote innovation while protecting consumers. This legislative approach of balancing those key priorities is exactly what our industry has been advocating. It’s also what consumers are demanding.

We commend the efforts of House Financial Services Committee Chairman Patrick McHenry (R-N.C.) and House Agriculture Committee Chairman Glenn Thompson (R-Pa.) who spearheaded this legislation. They dedicated months of work, consistently engaging with industry stakeholders, including with Blockchain Association member companies, to understand the key issues and try to get the framework right.

While FIT21 isn't perfect – no bill is – we will continue advocating for productive changes. Today’s vote represents undeniable forward progress on the path to a rational policy environment that unlocks clarity for digital assets in the United States. After the difficulties of 2022, it is gratifying to see elected leaders champion this critical technology that a growing number of Americans want their government to support, or at the very least not impede.

The House vote reaffirms crypto's growing political momentum, following positive developments such as the recent bipartisan congressional repeal of SAB121, the SEC's misguided and illegal accounting guidance. A recent poll shows large and growing factions of the American electorate want to elect politicians that understand crypto and are willing to respect and support the technology's growth in the U.S.

See also: The Biden Administration Is Easing Up on Crypto (a Vibes Analysis) | Opinion

And crypto may yet become a live issue in the upcoming presidential race, with former President Trump recently embracing the technology with an explicit ask for support.

As FIT21 advances to the Senate, Blockchain Association and our members will remain constructively engaged, advocating for smart policies that foster responsible innovation and, most of all, protect consumers. We express sincere gratitude to the House leaders who led the charge to reach this watershed moment – and we look forward to maintaining crypto's extraordinary political momentum in the months ahead.