The crypto world is full of discussions about new US laws. A big bill called the Market Structure Bill aims to bring order to cryptocurrency trading. But not everyone is happy. THE
What is the ?
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This bill attempts to clear up confusion in crypto rules. Currently, there are two agencies competing for crypto: the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission). The SEC says most tokens are securities. The CFTC manages commodities like Bitcoin.
FIT21 draws a line:
- Decentralized assets go to the CFTC. These are tokens from projects without a central boss.
- Centralized assets go to the SEC. These come from companies that control the token.
It also sets rules for exchanges, wallets and stablecoins. Big players like Coinbase and a16z support it. They want clear rules to develop in the United States
The rise of and why it is important
DeFi has seen rapid growth. In 2021, its locked value reached $250 billion. Even after the crashes, it remains strong, at over $100 billion today. For what? It offers freedom from banks and high fees.
But American regulators are scaring away DeFi projects. Many are moving to places like the Cayman Islands. THE
How the bill fails
The bill looks good on paper. But
- Control test: To be “decentralized”, a project must prove that no one controls it. Who decides? Lawyers? This could still force DeFi teams to sign up.
- No innovation without authorization: True DeFi is open. Everyone can build. The bill could require licenses for frontends or liquidity pools.
- Stablecoin rules: DeFi relies on stablecoins like USDC. The bill adds surveillance, but it could ban algorithmic surveillances or add KYC.
- Executing powers: The SEC and CFTC have more tools to pursue. DeFi protocols could face lawsuits for user actions.
These gaps are worrying
Voices from
Many cryptocurrencies are cheering for FIT21. This could end SEC lawsuits against Coinbase or Binance.US. But the DeFi maxis are making themselves heard.
“FIT21 is a Trojan horse for more regulation. DeFi needs true decentralization, not CFTC oversight.
— One of the best DeFi developers on
Groups like DeFi Education Fund are pushing for changes. They want a “safe harbor” for fully decentralized protocols. Without it, the community could lobby against the bill or move abroad.
Advantages and disadvantages of
| Benefits | Disadvantages |
|---|---|
| Clear rules for exchanges | May harm small DeFi projects |
| CFTC gets more power for Bitcoin | The control test is vague |
| Boosts US crypto hubs | More agency power to prosecute |
| Stablecoin framework | Ignores DeFi without permission |
Pros help centralized cryptography. The cons hit
What happens if Stay dissatisfied?
If the bill is adopted as is, the
- Hard lobby: Push Senate amendments for DeFi protections.
- Going abroad: Build in Dubai or Singapore.
- Ignore the US rules: Stay decentralized and hope for the best.
- Vote with your feet: US users could move to global DeFi.
Rejection could stall crypto growth in the United States. Europe and Asia could instead take the lead.
The Path Forward for Crypto Regulation
Congress must balance security and innovation. A good invoice:
- Clearly define decentralization.
- Protect protocols without authorization.
- Let DeFi thrive under light rules.
Listen to it
Conclusion: don’t let Escape
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Stay tuned for updates on FIT21 and crypto regulations. What do you think? Will DeFi get its due?
Image Suggestions: Crypto Bill Chart, DeFi Charts, Congress Building.
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