Crypto bills face setbacks in House as Republicans struggle to forge consensus
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Representations of virtual cryptocurrencies are seen in this illustration taken November 28, 2021. Photograph: (Reuters)
The crypto bills would establish market structure rules to determine when crypto products are commodities and not under the jurisdiction of the Securities and Exchange Commission (SEC).
The future of three key cryptocurrency regulation bills remained uncertain on July 16 after a prolonged and contentious debate in the Republican-controlled US House of Representatives. The legislation, designed to create the first federal framework for digital assets, was delayed for over nine hours as GOP (Grand Old Party) lawmakers struggled to find common ground. However, late on July 16, after intervention by President Donald Trump, the bills were cleared for debate, paving the way for a potential breakthrough in what had been described as Crypto Week on Capitol Hill.
The trio of bills includes the GENIUS Act, which passed the Senate in June, as well as the CLARITY Act and a controversial measure to block the Federal Reserve from issuing a central bank digital currency (CBDC). The legislation would significantly reshape the regulatory landscape for cryptocurrencies, including stablecoins, which are pegged to the US dollar, and define when crypto products are considered commodities rather than securities.
Trump’s influence and GOP divisions
The road to approval hit a major hurdle on July 15 when a group of conservative Republicans joined Democrats in blocking a procedural vote. The standoff appeared to jeopardise the entire package, but Trump intervened later that day, meeting with a dozen conservative holdouts and securing their support for a second vote. Despite this effort, opposition resurfaced on July 16 from moderate Republicans, with some lawmakers in key committees opposing last-minute changes to the bills.
“We had a lengthy negotiation process,” House Speaker Mike Johnson, R-La., told reporters after the vote. “It took longer than we had hoped, but we’re pleased we were able to break the logjam. Consensus was built, and now we're moving forward.”
Late on July 16, after hours of closed-door discussions, a final vote advanced the crypto bills to the floor for debate. The final vote was a narrow 217-212, marking a new record for the longest open vote in modern House history. A crucial part of the compromise included attaching the anti-CBDC measure to the must-pass National Defense Authorisation Act (NDAA), a move that was seen as key to securing the votes of conservatives, particularly those concerned about government surveillance over financial transactions.
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A watershed moment for crypto legislation
For the crypto industry, the vote was a major step forward after months of uncertainty. The legislation’s passage through the House would be a critical milestone, particularly the stablecoin bill, which has already passed the Senate. Stablecoins have gained popularity in the cryptocurrency market as a way to move funds quickly and cheaply compared to traditional banking systems.
Additionally, the bills would establish market structure rules to determine when crypto products are commodities and not under the jurisdiction of the Securities and Exchange Commission (SEC). The third bill, strongly supported by conservatives, would prevent the Federal Reserve from issuing a digital currency, which many see as a potential threat to privacy and financial autonomy.
Despite the setbacks, the resolution of the procedural hurdles raised hopes that Congress could finally provide a regulatory framework for digital assets. The crypto industry, which has contributed millions of dollars to House members during past campaigns, is eager for clear federal rules that would help it grow and thrive in the US.
Trump’s backing of the legislation has also drawn attention. Once a sceptic of cryptocurrency, Trump has embraced the industry in recent months, even launching his own meme coin and entering the crypto mining business. His involvement has sparked discussions about the broader role of crypto in the American economy and his influence over the Republican Party.
With the procedural roadblocks cleared, House leaders are now expected to vote on the GENIUS Act as early as July 17, with other measures possibly pushed into next week. However, the contentious battle in the House reflects the broader divisions within the GOP on how best to regulate the rapidly growing digital asset sector.