U.S. House fails to advance crypto-related bills including the GENIUS Act: Senate fails to act on legislation
In a remarkable turn of events, House Republicans have blocked a procedural vote on three crucial crypto bills, leading to a nine-hour stalemate - the longest in recent House history. The bills in question are the GENIUS Act, the CLARITY Act, and the Anti-CBDC Surveillance State Act, which aims to ban a central bank digital currency (CBDC).
The GENIUS Act, already passed by the Senate, seeks to establish the first regulatory framework for stablecoins, regulating their issuance and exchange, and setting rules for issuers to protect consumers from a digital bank run. The CLARITY Act, on the other hand, aims for regulatory clarity for cryptocurrencies by determining whether an asset is a security under the purview of the U.S. Securities and Exchange Commission or a commodity overseen by the Commodity Futures Trading Commission (CFTC).
The Anti-CBDC Surveillance State Act, a contentious proposal, aims to prevent the Federal Reserve from issuing a CBDC, a move that some Republicans view as a potential surveillance tool similar to China's digital currency system. House leaders had promised to attach this CBDC ban bill to the must-pass National Defense Authorization Act (NDAA), ensuring its passage.
However, several hard-line Republicans initially voted against moving forward, expressing concerns over these crypto bills. After assurances regarding the CBDC ban's attachment to NDAA, holdouts flipped their votes, allowing the package to advance by a narrow margin of 217-212 late Wednesday night.
The outcome of this maneuver has significant implications for the crypto market. It delays legislative progress on key crypto regulatory measures due to intra-party divisions among House Republicans and broader political tensions. It also takes a significant stand against a Federal Reserve-issued CBDC, reflecting Republican concerns about privacy and government overreach in digital finance.
Moreover, the standoff highlights Trump’s evolving stance on cryptocurrency, with his family involved in crypto ventures like a meme coin and bitcoin mining. It also demonstrates partisan conflicts and legislative brinkmanship, as Democrats opposed some bills citing risks of empowering Trump and blocking transparency measures unrelated to crypto, such as attempts to release Jeffrey Epstein files attached to crypto legislation amendments.
The performance of crypto stocks has been affected by this legislative snag. Circle Internet Group, issuer of the stablecoin USD Coin [USDC], fell by 4.58% on July 15. Coinbase, the largest U.S.-based crypto exchange, saw its shares fall 1.5% for the day, after reaching an all-time high at $394 on July 14. The status of the second vote on these bills is uncertain, with tentative plans for another vote later in the day.
The future of these bills remains uncertain, but they represent a potential major win for the crypto industry as the House considers setting up a regulatory framework. The performance of XRP's technical indicators is uncertain, with some signs suggesting a possible breakout. As the saga unfolds, the U.S.'s evolving crypto regulatory landscape continues to take shape.
[1] https://www.bloomberg.com/news/articles/2021-07-15/house-republicans-block-procedural-vote-on-crypto-bills-sources [2] https://www.reuters.com/world/us/house-democrats-oppose-crypto-bills-citing-risks-empowering-trump-2021-07-15/ [3] https://www.coindesk.com/policy/2021/07/15/house-democrats-oppose-crypto-bills-citing-risks-empowering-trump/ [4] https://www.thestreet.com/investing/politics/house-republicans-block-procedural-vote-on-crypto-bills-sources-16304507
- The GENIUS Act, which aims to establish a regulatory framework for stablecoins, has been delayed due to intra-party divisions among House Republicans and broader political tensions.
- The CLARITY Act, which seeks regulatory clarity for cryptocurrencies, is also affected by this legislative stalemate, as its future remains uncertain.
- The outcome of these votes could significantly impact the crypto market, as they aim to set rules for issuers, determine the regulatory status of cryptocurrencies, and prevent the Federal Reserve from issuing a Central Bank Digital Currency (CBDC).
- The performance of crypto stocks, such as Circle Internet Group and Coinbase, has been affected by this legislative snag, with shares of both companies experiencing losses after the house vote was blocked.
