HomeNewsFIT21 Act Passed: How This Affects Cryptocurrency Custody by Financial Institutions

FIT21 Act Passed: How This Affects Cryptocurrency Custody by Financial Institutions

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  • The House of Representatives passed the FIT21 Act, promoting technological innovation in financial services.
  • FIT21 facilitates financial institutions’ role as cryptocurrency custodians, enhancing their operational capabilities.

US Senator Cynthia Lummis has acknowledged the potential of the cryptocurrency industry to enhance the US economy and stressed the importance of embracing these new opportunities.

Alongside Senator Kirsten Gillibrand and others, Lummis has been instrumental in establishing a financial innovation caucus aimed at shaping regulations for the growing cryptocurrency market.

Lummis’ Advocacy for Cryptocurrency

Senator Lummis has consistently supported cryptocurrencies, frequently briefing Congress on the relevance of digital currencies in today’s financial landscape. She has promoted Bitcoin not only as an investment but also as a viable payment option, particularly noting its relevance amid global inflation.

Reflecting on her tenure, Lummis commented on the increased understanding of digital assets among Senate members since her arrival, attributing this to her efforts in distinguishing Bitcoin from other cryptocurrencies.

Cryptocurrency in the Context of US Politics

As the US approaches its presidential elections, the integration of digital assets into the economy shows promising signs. However, the overall sentiment within the cryptocurrency community remains mixed.

Samson Mow, a notable Bitcoin advocate, has voiced concerns about potential government interference which could undermine the foundational principles of Bitcoin. He emphasized that deviation from these core values could lead to significant financial losses, similar to those seen in major exchange failures like FTX.

Despite these concerns, Mow praised Lummis for her effective advocacy for broader cryptocurrency adoption within a strict legal framework.

Progress in US Crypto Regulations

Recent regulatory advancements in the US include the Securities and Exchange Commission’s (SEC) approval of Bitcoin and Ethereum spot Exchange-Traded Funds (ETFs). Additionally, the House of Representatives has passed the Financial Innovation and Technology for the 21st Century Act (FIT21). 

This bipartisan-supported legislation enhances the ability of financial institutions to act as custodians for cryptocurrencies, countering earlier limitations imposed by SEC chairman Gary Gensler’s Staff Accounting Bulletin No. 121 (SAB 121).

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: info@ethnews.com Phone: +49 160 92211628