The Unintended Consequences of FIT21’s Crypto Market Structure Bill
The FIT21 Act, passed by the House, aims to regulate the U.S. crypto industry but introduces a problematic bifurcated market for crypto tokens, potentially leading to market fragmentation and compliance complications. The bill's distinctions between restricted and unrestricted digital assets could disrupt the global nature of crypto tokens, necessitate technological modifications, and increase compliance costs. Additionally, it may lead to regulatory arbitrage and harm U.S. consumers by creating unbalanced market dynamics and benefiting professional arbitrageurs. Lawmakers need to refine the bill to unify spot markets for fungible crypto tokens in a coherent regulatory framework to protect customers and ensure well-functioning U.S. digital asset markets.
