‘Big win for Web3′: Indian crypto industry reacts as US House’ approves FIT21 bill

The US House of Representatives this week gave the green light to a new bill that aims to regulate the crypto sector. While the bill FIT21 (Financial Innovation and Technology for the 21st Century Act) is still awaiting the approval of the US Senate, stakeholders in the Indian crypto and Web3 space have praised the decision jointly made by both the US’s opposing Democratic and Republican parties. Indian crypto commentators are calling the development ‘historic’ and ‘pivotal’ for the global crypto sector.

The US is touted as the largest crypto market in the world. According to Security.org, 40 percent of American adults now own crypto, up from 30 percent in 2023. Cryptocurrency decisions made in the US have had a significant impact on the global crypto sector. BTC ETFs saw billions of dollars inflow after they were approved by the US SEC earlier this year.

Assessing the influence the US has over the trajectory of the crypto industry, commentators from India’s Web3 sector say the US regulatory framework for crypto could show positive results. Speaking to Gadgets 360, Sharedeum co-founder and CEO Nischal Shetty outlined what the account could mean for Indian crypto enthusiasts.

“The US is taking a crucial step towards integrating crypto assets with traditional markets, a move India should consider carefully. The FIT21 law is a big win for the Web3 ecosystem. By offering regulatory clarity and encouraging innovation, this legislation has the potential to drive broader crypto adoption and expand the Web3 landscape,” said Shetty.

The crypto sector, despite its offering of advanced financial services, is riddled with uncertainty as digital assets resist easy categorization. Separating these assets into securities or commodities and ensuring their legal use is among the top priorities for the US, as well as other countries.

The US move to distinguish between different categories of crypto assets, according to Shetty, will have a strong effect on the international crypto industry.

“To capitalize on this momentum, it is critical to focus on developing the Web3 ecosystem in India. This includes educating young people about Web3, increasing the number of developers working on Web3 products, and creating more career opportunities in this space. With the clarity and support provided by initiatives like FIT21, we can expect a significant boost in adoption, which will naturally lead to better tax laws and regulatory frameworks,” added Shetty.

The first FIT21 approval comes just before Ether ETFs expect US approvals. Although the bill is still awaiting approval by the US Senate, Avinash Shekhar, co-founder and CEO of Pi42, a crypto-INR exchange, called the timing of the approval of these bills a watershed moment for the crypto industry.

Shekhar noted that these rules could reduce the SEC’s involvement in industry oversight. In the past, the US SEC’s actions have been frowned upon by the global crypto fraternity, which argues that the regulator’s investigations into several digital asset companies for reported irregularities are ultimately hindering crypto’s growth.

However, the crypto sector is still under the cloud of numerous accusations of fraud and financial irregularities against large companies. In November 2022, crypto exchange FTX collapsed as it came under regulatory and legal scrutiny over allegations of fraud. The investigation and subsequent trial resulted in the company’s former CEO and co-founder, Sam Bankman-Fried, being sentenced to 25 years in prison in March. Binance, the world’s largest crypto exchange, and its co-founder Changpeng Zhao were found guilty of money laundering in the US, before Zhao accepted a plea deal and was sentenced to four months in prison in April. These scandals end up shaking investor sentiment, causing most asset prices to fall.

Shekhar, however, said the bill could go a long way in bringing regulatory clarity to the sector. “This is a huge win for crypto as it clarifies the roles of the SEC and CFTC in regulating crypto. The FIT21 bill is considered a key step toward providing the regulatory clarity needed to support the growth and maturation of the digital asset ecosystem in the US while protecting consumers and maintaining market integrity,” noted Shekhar.

Crypto commentators in India also reacted to the development on social media.

Crypto rules are gradually being rolled out in India as well, to ensure that the communities of investors and traders dealing with digital assets, along with companies offering services related to these assets, are safe and compliant.