House Encryption Bill May Be Answer to America’s Regulatory Introspection. The Ball Is Now in the Senate’s Court

Americans have embraced digital assets. The recent Cryptocurrency Adoption and Sentiment Report found that digital asset ownership in the United States jumped from 30% in 2023 to 40% in 2024. This makes sense. Digital assets are providing better financial inclusion and empowering millions of Americans, but it’s up to Congress to act.

The U.S. House of Representatives has already seized the opportunity, passing a strongly supported, bipartisan bill that would protect consumers, improve economic mobility, promote innovation, and maintain U.S. leadership. Financial Innovation and Technology Act for the 21st Century (FIT21) updates U.S. securities laws that were conceived long before today’s technological advances. As digital assets continue to evolve, FIT21 assigns defined responsibilities to the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It also creates the tailored frameworks that will allow this industry to thrive in U.S. markets.

With this surge in American ownership, FIT21’s robust consumer protections are a much-needed safeguard. The bill separates consumer funds from institutional funds, provides risk disclosures, expands bankruptcy protections, and addresses conflicts of interest. This transparency will enable regulators and consumers to identify and address fraud before it becomes large-scale. FIT21 will also make it harder for bad actors to launder money and finance terrorism, and its cybersecurity standards will help prevent attacks on America’s financial infrastructure.

At the same time, FIT21 promotes innovation in the U.S. digital asset market by clarifying the rules of the industry. Today’s rules are confusing and sometimes redundant. The resulting uncertainty drives American innovators to offshore markets and penalizes small businesses struggling to navigate compliance costs and conflicting rules. This has prompted major economies such as the European Union, the United Kingdom, Singapore, Japan, South Korea, the United Arab Emirates, Brazil, and Australia to open their doors to these innovators.

Passing this comprehensive digital asset legislation is not only important for the companies themselves, but also for our economy and for U.S. leadership in a critical technology. In 2018, 40% of U.S. developers worked on Web3. By 2023, that figure had fallen to less than 26%, according to a Electric Capital Cryptocurrency Developer Report 2023.

The ball is now in the Senate’s court. By passing FIT21, Congress would ensure long-term stability for the digital asset market, ensuring EVERY consumer has a safer and more inclusive investment environment. At the same time, it would solidify our position as a global leader in the digital economy. Senators, let’s get FIT21 to the finish line.

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