Davis Polk partner Zach Zweihorn discussed the Financial Innovation and Technology for the 21st Century (FIT 21) Act and the key aspects of the bill with American Banker.

Zach explained that the bill would create much-needed legislative certainty around at least some aspects of the cryptocurrency market and would give banks a clear basis for becoming service providers to that industry.

“As a supervisory matter, banking regulators have been hesitant about banks engaging in digital asset activities given the regulatory uncertainties and risks inherent in the market,” Zach noted. “Passage of a comprehensive federal regulatory regime for digital asset activities could reduce the risks that supervisors see as presented by the industry, eventually making them more comfortable with the asset class.”

GOP tees up crypto vote with hopes of Democratic support,” American Banker (May 21, 2024) (subscription required)