The Financial Innovation and Technology for the 21st Century Act (FIT21) has been a topic of significant discussion and debate within the United States. Passed by the U.S. House of Representatives, FIT21 represents a major legislative step towards establishing a regulatory framework for digital assets in the country. The bill aims to provide clarity on the classification of cryptocurrencies as securities or commodities and delineates the regulatory responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Here are the key provisions of FIT21:

Delineation of Regulatory Responsibilities: FIT21 seeks to clarify the jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), which has been a major source of confusion. The SEC will oversee digital assets classified as securities, while the CFTC will regulate commodities and derivatives.

Consumer Protection Measures: The Act includes robust consumer protection measures designed to prevent fraud and market manipulation. It mandates comprehensive disclosure requirements for digital asset issuers and establishes clear guidelines for market participants.

Decentralization Test: A notable feature of the bill is the introduction of a “decentralization test” that will determine whether a token is a security or a commodity. This test allows crypto tokens to decentralize over time to become a commodity.

Prohibition of Agency Overreach: The legislation prohibits agencies from preventing the use of crypto, ensuring that the market remains open and accessible.

Study of Stablecoins: FIT21 requests the Treasury to conduct a study on stablecoins, which could influence future regulations and policies regarding these types of digital assets.

Definition of Decentralized Networks: The Act defines when decentralized networks are no longer considered securities, which could have significant implications for the classification and regulation of various cryptocurrencies.

Certification Process for Decentralized Assets: There is an established process to certify decentralized assets as commodities, which could streamline the regulatory process for new and existing tokens.

However, the reception of FIT21 has been mixed. While some view it as a positive move towards consumer protection and innovation facilitation, others argue that it could lead to regulatory overreach and stifle the growth of the crypto industry. SEC Chair Gary Gensler has expressed concerns that the bill could undermine existing securities regulations and put investors at risk.

The bill’s passage in the House has been seen as a bipartisan effort, with both Democrats and Republicans crossing party lines to support it. This suggests a growing recognition of the importance of cryptocurrency in the financial landscape and the need for clear regulatory guidelines.

Despite the approval from the House, the future of FIT21 in the Senate remains uncertain. There is no counterpart bill in the Senate, and the level of support for such legislation is unclear. The necessary committees have not done the same level of work on crypto, which could delay or even prevent the bill’s passage.

For crypto enthusiasts and investors in the United States, FIT21 represents both hope and concern. On one hand, it promises a more structured and secure market with defined rules. On the other, there is apprehension about the potential for regulatory overreach and the impact on innovation and growth within the crypto space.

As the debate continues, the crypto community will be watching closely to see how FIT21 evolves and what it will mean for the future of cryptocurrency in the United States. The outcome of this legislative process will likely have significant implications for the global crypto market and could set a precedent for other countries looking to regulate digital assets.

Below, I share a video on why some nations are poor, and why others are rich. It turns out that rich nations operate on CAPITAL while poor ones are configured around money. In those poor nations, money is supreme, with largely nonexistent capital, making it harder to unlock critical enablers to drive growth and prosperity.

Money is a subset of Capital, and companies and nations which allow Money to rule over them underperform. In Nigeria, we’re pursuing too much money, with limited efforts designed to advance Capital. That must change.

Until Nigerian policymakers focus on creating systems for Capital development and evolution over our fixation on Money, we will continue to struggle. When I read our policies on land, agriculture, etc, I see policies geared towards Money, when what we should focus on is how to stimulate Capital, even as we pursue the scaling of money.

Money is a subset of Capital, and companies and nations which allow Money to rule over them underperform. In Nigeria, we’re pursuing so much money, with limited efforts designed to advance Capital, triggering a system where there are many farmlands but no capital market product for farmlands. And without Capital, we scale poverty. When South Africa’s stock (capital) market has close to $1 trillion value, and Nigeria’s is hovering around $50 billion, you can see that we have a lot of money in Nigeria, but limited Capital. That must change.

It is an anomaly: the nation with the largest debt is also the one that is seen as the most developed and richest. The US national debt  is the total amount of outstanding borrowing by the US Federal Government accumulated over the nation’s history. Today, that number is about $34.75 Trillion.

It is a real economic mystery when you think deeper: Nigeria does not even have a lot of debts, but it is “poor”, and experts will tell you not to over-borrow because it can put you in trouble, if you are unable to pay. So, how can a New Yorker who has thousands of dollars of debt on his head, better than an Ovim man who has no debt? That is where the mystery is solved! Yes, the magic of capital, over money, making the United States better and richer.

First, some experts have modeled that the United States interest payment will hit $1.6 trillion by year end, making it the largest US Government outlay. In nearly every other nation in the world, that would be an economic apocalypse. But for the United States with the custodial of the dollar, the impact would be muted.

Why? In an Igbo novel, Uwadiegwu, the author dropped a great hint: when you borrow, go to your kinsman so that if the debt goes bad, he may lock you up, but at the same time he would be expected to take care of your family since he is your kinsman! That is how debts work: pains are lesser when the debt is home. America borrows dollars and they’re responsible for printing dollars. No other country enjoys that combo.

So, provided the US has those special printers, they can print US dollars, and if necessary, flood the world with dollars. Like the Igbo name “Nwaoha” – a child is born to the community, not just to the parents – the US dollar is a currency for the world, and not just for America. So, when the US prints, and triggers inflation, everyone shares the fun!

Of course, the US companies which hold these debts cannot wish for the US to have pains since if the US goes, companies like Blackrock, State Street, etc will fade. That is possible because these debts are all localized.

Contrast with Nigeria. Nigeria has to earn US dollars to pay its US dollar-denominated debts, and the debts are not with Nigerian companies or entities. Magically, that burden pushes Nigeria to make decisions which must help it earn US dollars to service those debts. Consequently, the agriculture policy focuses on things which can be exported to earn US dollars, and not necessarily what people need for dinner, lunch and breakfast in Ovim, Ibadan, Uyo, and Yobe.

Money is a subset of Capital, and companies and nations which allow Money to rule over them underperform. In Nigeria, we’re pursuing so much money, with limited efforts designed to advance Capital, triggering a system where there are many farmlands but no capital market product for farmlands. And without Capital, we scale poverty. When South Africa’s stock (capital) market has close to $1 trillion value, and Nigeria’s is hovering around $50 billion, you can see that we have a lot of money in Nigeria, but limited Capital. That must change.

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