US house passes FIT21 bill: bipartisan approval signals new era for crypto regulations

The US House of Representatives passed the FIT21 cryptocurrency market bill on May 22, garnering bipartisan support. A total of 71 Democrats joined Republicans, resulting in a 279-136 vote.

This marks a major milestone for the crypto, blockchain, and Web3 sectors, bringing positive news to Web3 gaming companies that have recently secured substantial venture capital funding.

FIT21 bill: transforming US crypto regulation

The FIT21 bill aims to change the rules for digital assets in the US This will help boost innovation while keeping consumers safe. Suppose the US Senate approves the bill and President Joe Biden signs it into law. In that case, the CFTC will become the primary regulator for digital assets considered commodities. It will also clearly define the Securities and Exchange Commission (SEC) role.

Sheila Warren, CEO of the Crypto Council for Innovation, expressed that this vote marks a significant milestone for the cryptocurrency sector. The council highlighted that the approval is the culmination of several years of diligent work by policymakers, their teams, and the industry to protect consumers while ensuring the United States remains a leader in digital innovation.

The newly passed FIT21 bill offers a more transparent framework for crypto companies and digital asset creators, including those within the gaming sector. This clarity will help them determine whether their digital assets are classified as securities.

In the past, vague guidelines led to multiple lawsuits between government agencies and rapidly evolving startups. The bill now introduces a specific test to ascertain if a project qualifies as a decentralized blockchain.

Aron Beierschmitt, CEO of Laguna Games and the maker of Crypto Unicorns mentioned in an email to GamesBeat that passing the FIT21 bill in the House is a big step forward for the US crypto industry. This move shows growing support from lawmakers for precise rules for digital assets.

While there are still challenges, especially in the Senate, this development indicates that integrating crypto into the financial system is gaining political support. It also highlights the potential of the crypto industry to influence future elections and economic policies.

He added that this goes beyond gaming and will benefit the entire digital asset space, including Web3 gaming.

Rep. Ro Khanna (D-Calif.) from Silicon Valley said blockchain innovation should occur in the US

In an email to GamesBeat, Kurt Watkins, founder of Watkins Legal, observed that it's significant that, even amidst hyper-partisan times and an election year, both the House and Senate managed to pass, with substantial bipartisan support, a law to overturn the SEC’s contentious bulletin aimed at keeping major financial players out of crypto markets.

Remarkably, just a week later, the House approved another law with bipartisan backing that begins acknowledging crypto as a unique asset class.

Unlike earlier instances, Watkins pointed out that President Biden hasn't threatened to veto this new legislation. He expressed hope that this may signal an end to the SEC's one-sided governance and a shift toward a more competent, balanced, and fair regulatory approach to the crypto market in the United States.

David Hoppe, managing partner of Gamma Law, noted that unclear and hostile regulations have pushed many blockchain game startups to set up outside of the US and avoid US users in the past two years. Hoppe added that passing FIT21 could greatly reduce these issues, promoting innovation and responsible growth within the US blockchain games sector and benefiting companies and players.

Ethereum ETFs approved

The SEC's approval of Ethereum ETFs is a big win for the crypto industry. Still, Ether's price only went up by 1%, and many factors influence this.

Technical and psychological elements drive the crypto market. The market probably expected this approval, following the saying: buy the rumor, sell the news.

The market's response is similar to what we saw with the approval of Bitcoin ETFs. Investors are hopeful but still cautious. This careful behavior shows that they have learned from past experiences. Ongoing regulatory issues add to their hesitation. The SEC's strict stance on cryptocurrencies and whether Ether is a security or a commodity are vital factors that affect investment decisions.

Nonetheless, the approval of Ethereum ETFs marks a significant milestone for broader acceptance. This move provides traditional investors a regulated and convenient avenue to invest in Ether, potentially driving its price. Enthusiasm reverberated throughout the crypto sector following the SEC's decision.

Brad Garlinghouse, CEO of Ripple, hailed it as a crucial moment for the crypto community, particularly amid ongoing tensions with US regulators.