Unintended Consequences of FIT21’s Cryptocurrency Market Structure Act

The two-pronged market for restricted and unrestricted digital assets proposed in the bill ignores fungibility, a fundamental characteristic of cryptocurrency tokens. This bill disrupts this principle by creating categories of restricted and unrestricted assets, resulting in confusion and market fragmentation. This could impair liquidity, complicate risk management mechanisms such as trading and derivatives, reduce the overall utility of cryptocurrency tokens, and ultimately stifle innovation in a nascent industry.