The U.S. Congress wrapped up its dedicated “Crypto Week” with major strides in cryptocurrency legislation. The House of Representatives approved the GENIUS Act, a key piece of legislation concerning stablecoins, and forwarded it to the President for final approval. This bill garnered bipartisan backing after several revisions, representing a crucial moment for the cryptocurrency sector within the United States.
In addition, the House also gave the green light to the CLARITY Act, a market structure bill strongly supported by the blockchain community. A separate bill, proposed by a Republican Representative, seeking to prohibit the Federal Reserve from introducing a central bank digital currency (CBDC) also passed. These two bills now advance to the Senate, where their fate could involve further debate and possible alterations, given the slightly smaller Republican advantage in the Senate.
The GENIUS Act, now awaiting presidential signature at the White House, is anticipated to be signed into law by U.S. President Donald Trump. The provisions of the law will be enforced 18 months after the signing date, or 120 days after the U.S. Treasury and Federal Reserve finalize and release the specific regulations. When fully implemented, stablecoin issuers will be required to meet strict reserve demands and adhere to the Bank Secrecy Act.
According to Logan Payne, a legal expert specializing in cryptocurrency, the GENIUS Act is likely to push many U.S.-based stablecoin issuers into becoming banks. The legislation confines stablecoin issuers solely to that particular activity, potentially driving them to apply for bank charters. This would allow them to offer a broader array of financial services without the burden of acquiring licenses in each individual state.
The cryptocurrency industry didn’t secure every objective they hoped for with the GENIUS Act. Brian Armstrong, CEO of Coinbase, had pushed for a clause that would enable stablecoin issuers to offer interest on customer’s stablecoin holdings, arguing this would broaden access to competitive market yields. However, this provision was ultimately absent from the final version of the legislation.
Furthermore, the bill dictates that three years after it is enacted, foreign stablecoin issuers lacking U.S. approval will be barred from offering their stablecoins within the United States. Some exceptions are possible if the U.S. Treasury judges that the issuer’s home country possesses a comparable regulatory framework.
The CLARITY Act and the Anti-CBDC bill are now under consideration in the Senate. The CLARITY Act is designed to exclude “digital commodities on established blockchains” from the Securities Act of 1933 and shift regulatory jurisdiction from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC). Despite criticism from certain House Democrats, the Act received substantial bipartisan support.
Senate Democrats who were in favor of the GENIUS Act may also lend their support to the CLARITY Act, in spite of clear opposition from Democrats who are skeptical of cryptocurrency. The vote on the Anti-CBDC bill was closer, revealing a greater political division over whether the Federal Reserve should introduce a digital dollar. The bill’s sponsor expressed concerns that a CBDC is an “insidious technology” that compromises privacy.
The Anti-CBDC bill could potentially pass if a few Senate Democrats vote in favor, especially given that a recent survey indicated that 22% of Democrats are against a CBDC. The cryptocurrency industry is optimistic regarding these developments, viewing them as a major advancement towards incorporating cryptocurrency more fully into the U.S. financial system.
Key figures in the crypto space believe these bills could influence cryptocurrency policies worldwide. Nathan McCauley, CEO of Anchorage Digital, emphasized the CLARITY Act’s significance for fostering market transparency and integrating cryptocurrency into traditional financial structures. James Harris, group CEO at crypto lending company Tesseract, pointed out that U.S. policy often establishes a global standard and that delays could allow other regions to gain a competitive edge.
With an increasing number of politicians embracing cryptocurrency, the passage of these bills seems more like a question of “when” rather than “if.” The cryptocurrency industry is well-positioned for substantial growth and assimilation into the mainstream financial system, heralding a new era in digital asset regulation and acceptance.