Alongside the GENIUS Act, the House passed the Digital Asset Market Clarity Act, or CLARITY Act, with a 294-134 vote. This bill addresses a long-standing industry pain point by defining when digital assets are classified as securities under the Securities and Exchange Commission (SEC) or commodities under the Commodity Futures Trading Commission (CFTC). During the Biden administration, the SEC’s aggressive stance—treating most cryptocurrencies as securities—led to lawsuits against major exchanges like Coinbase, Binance, and Kraken. The CLARITY Act shifts significant oversight to the CFTC, seen as more crypto-friendly, potentially easing compliance burdens for platforms. However, the bill still requires Senate approval, and some Democrats worry it could favor industry giants, including ventures linked to Trump’s family, by softening regulatory scrutiny.
Blocking a Digital Dollar
The Anti-CBDC Surveillance State Act also cleared the House with a 219-210 vote, reflecting conservative concerns about financial privacy. This legislation prohibits the Federal Reserve from issuing a central bank digital currency (CBDC), which critics argue could enable government surveillance of transactions. While no serious CBDC proposals have emerged from U.S. officials, the bill responds to fears that a digital dollar might undermine existing cryptocurrencies and individual financial autonomy. The act’s passage underscores a broader push to limit federal overreach in the digital asset space, aligning with the crypto industry’s advocacy for decentralized systems.
Industry Influence in Washington
The crypto sector’s growing clout in Washington was evident during this so-called “Crypto Week.” Industry leaders, including Coinbase CEO Brian Armstrong and Blockchain Association CEO Summer Mersinger, hailed the votes as transformative. Armstrong noted the legislation brings the U.S. closer to clear rules fostering crypto growth, while Mersinger called the GENIUS Act’s bipartisan support a “watershed moment.” The industry’s influence stems from substantial investments, with over $130 million spent on congressional races last year, securing access to key policymakers. Trump’s campaign, backed by crypto executives, promised regulatory relief, including replacing former SEC Chair Gary Gensler, a figure vilified by the industry for his stringent enforcement.
Political Tensions and Market Reactions
The road to passing these bills was rocky, marked by a nine-hour House vote—the longest in U.S. history—driven by conservative holdouts. Ultraconservative Republicans, including members of the House Freedom Caucus, initially blocked the legislation, demanding stronger anti-CBDC provisions. Trump’s direct intervention, including meetings with dissenters, helped broker a deal to advance the bills. Some Democrats, like Senators Jeff Merkley and Chuck Schumer, criticized the measures, citing potential conflicts of interest tied to Trump’s World Liberty Financial venture. Market reactions were mixed; for instance, Circle Internet Group, a stablecoin issuer, saw its stock dip 5% after initial vote delays but later recovered nearly 4% as progress resumed.
What’s Next for Crypto Regulation
The GENIUS Act’s imminent signing into law positions the U.S. as a potential leader in digital assets, with stablecoin regulations offering a foundation for secure innovation. The CLARITY Act’s fate in the Senate remains uncertain, facing scrutiny from Democrats wary of its implications for investor protections. The Anti-CBDC Act, while symbolically significant, addresses a hypothetical threat but reinforces the industry’s push for minimal government involvement. As the crypto market evolves—evidenced by Bitcoin’s recent surge past $120,000—these legislative steps signal a shift toward mainstream acceptance, balancing innovation with oversight in a sector poised for growth.
