The week the US government spotlighted cryptocurrency saw significant progress in the House of Representatives, with the passage of the first federal law aimed at overseeing stablecoins. Having already secured approval in the Senate, this legislation awaits only the president’s signature to become law.
In addition, two further pieces of legislation related to cryptocurrency also cleared the House and are now heading to the Senate for consideration.
This represents a substantial victory for the cryptocurrency sector, which invested considerable sums in the previous election cycle. These investments aided candidates, including figures like Donald Trump, who has become a vocal proponent of cryptocurrency investments.
During this “Crypto Week,” the House initially intended to vote on three cryptocurrency bills. However, disagreements among Republican representatives regarding the consolidation of these measures led to delays exceeding a full day.
Ultimately, Republican leadership decided to hold individual votes on each of the three bills. The stablecoin regulation bill, having previously garnered broad support in the Senate, is now positioned for presidential approval.
The remaining two bills, addressing a broader market structure for cryptocurrency and a prohibition against the Federal Reserve issuing a digital currency, will be debated in the Senate at a later date.
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The stablecoin bill, formally known as the “Genius Act,” establishes preliminary safeguards and consumer protections for this form of cryptocurrency. These include setting reserve requirements, mandating audits, and ensuring regulatory compliance.
Stablecoins are digital currencies whose value is linked to a stable asset, most commonly the US dollar, to minimize price fluctuations.
“Payment systems are currently undergoing a global transformation,” remarked House Financial Services Chair French Hill of Arkansas during the stablecoin legislation debate. He emphasized that the bill would “guarantee American competitiveness and robust safeguards for our consumers.”
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Both lawmakers and industry experts view the stablecoin measure as a significant step toward fostering legitimacy and building consumer confidence in the rapidly expanding cryptocurrency market. US Treasury Secretary Scott Bessent previously indicated that the legislation could potentially facilitate the growth of the currency into a $3.7 trillion market by the end of the decade.
The proposed law specifies requirements for stablecoin issuers, including adherence to US anti-money laundering regulations and sanctions laws. Additionally, it mandates that issuers maintain reserves to back their cryptocurrencies.
Without such a framework, members of the Senate Banking Committee cautioned, “consumers risk facing issues such as unstable reserves or unclear operational practices from stablecoin issuers.”
Following the House votes, Republican representatives strongly encouraged the Senate to consider the second bill, which aims to establish a clear market structure for cryptocurrency.
This legislation seeks to clarify the regulatory framework for digital assets. It outlines which types of cryptocurrencies should be classified as commodities, subject to oversight by the Commodity Futures Trading Commission, and which should be treated as securities, regulated by the Securities and Exchange Commission. Generally, tokens linked to established blockchains, like Bitcoin, would be regarded as commodities.
The third bill, which passed in the House by a narrower margin of 219-210, prohibits the United States from issuing a “central bank digital currency,” which would represent a government-backed form of digital money.
The cryptocurrency industry has long expressed frustration over the lack of clarity in US laws, arguing that this ambiguity has hindered operations. Concerns have also been raised that the current administration has attempted to regulate through enforcement actions rather than through transparent rule-making processes.
The passage of these bills has been a key objective for the industry, which has rapidly become a significant presence in Washington through substantial campaign donations and lobbying initiatives.
Patrick McHenry, previously chair of the House Financial Services Committee and now vice chair of the crypto firm Ondo Finance, described the legislation as having a “massive generational impact,” drawing parallels to the securities laws enacted in the 1930s that helped position Wall Street as a global financial center.
“These bills are going to make the United States the global leader in digital assets,” he asserted.
While these measures have garnered bipartisan support, they have also faced resistance from Democrats who contend that the legislation should address Trump’s personal financial interests within the cryptocurrency domain.
A clause within the stablecoin bill prevents members of Congress and their immediate families from profiting from stablecoins. However, this restriction does not extend to the president and his family.
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According to Forbes, the former president’s cryptocurrency holdings exceed the value of any single real estate asset within his portfolio, with an estimated worth of $1 billion.
The president’s family maintains a significant stake in World Liberty Financial, a cryptocurrency project that has launched its own stablecoin, USD1.
Trump reported earnings of $57.35 million from token sales at World Liberty Financial in 2024, as disclosed in a public financial statement released in June.
Some Democrats have also criticized the bills for what they perceive as an insufficiently robust regulatory framework that could present long-term financial risks. They have also voiced concerns that the legislation might pave the way for major corporations to issue their own private cryptocurrencies.
Massachusetts Senator Elizabeth Warren, a leading Democrat on the Senate Banking Committee, cautioned, “If this bill becomes law, it would allow companies like Elon Musk and Mark Zuckerberg to essentially create their own money. The bill continues to permit Big Tech corporations and other large conglomerates to issue their own private currencies.”
