The approval of the Financial Innovation and Technology for the 21st Century Act (FIT21) on Wednesday could bring the US in line with other nations regarding its regulatory framework for cryptocurrencies, according to Kyle Bligen, the director of financial policy at the Chamber of Progress.

Bligen mentioned in an interview with Cryptonews on Thursday that if the FIT21 bill passes the Senate and becomes law, it could prevent crypto companies from relocating to countries with clearer regulations.

The bill would grant more flexibility to cryptocurrency operators in the US and transfer more regulatory responsibilities for digital assets to the Commodity Futures Trading Commission (CFTC). It would also establish clearer guidelines on which businesses fall under the jurisdiction of the SEC and CFTC, setting up a registration system for these entities. This would enable them to legally cater to customers interested in trading digital assets, with the SEC overseeing assets classified as securities and the CFTC managing commodities and derivative products related to digital assets.

Bligen highlighted that the US currently relies on the Howey Test, a nearly century-old SEC law, to regulate a technology like cryptocurrency, which was developed only a few years ago. He argued that this outdated system is ineffective for regulating this rapidly evolving technology and expressed hope that the FIT21 bill would position the US as a regulatory leader focused on robust consumer protections.

Harry Sudock, chief strategy officer at Bitcoin miner GRIID, also sees FIT21 as a potential catalyst for the US to become more competitive in the global crypto landscape. Sudock believes the bill could attract top talent in the crypto industry to the US and encourage them to stay.

Although FIT21 successfully cleared the House, its journey to becoming law is not yet complete. It must still pass through the Senate and receive the President's signature. Ronen Cojocaru, CEO of automated crypto trading platform 8081, highlighted the challenges FIT21 might face in the Senate, including the influence of public opinion, upcoming elections, and the need for bipartisan support. He also pointed out examples of countries like Switzerland, Singapore, and Malta that have embraced clear and supportive regulatory frameworks, attracting crypto businesses to their shores.