Win for the crypto industry: New major US regulation passed
Two additional crypto-related bills also passed in the House and will now proceed to the Senate.
This is a major win for the crypto industry, which poured millions into last year's election, supporting candidates, including Donald Trump, who became a major advocate for cryptocurrency investments.
The House had three crypto-related bills to pass this "Crypto Week". However, the bills were stalled for more than a day due to disagreements among House Republicans over how to combine the legislation.
Ultimately, GOP leaders put the three bills up for separate votes. One of the three bills, legislation to regulate a type of cryptocurrency called stablecoins, had already passed the Senate with broad bipartisan support and will now head to Trump's desk.
The other two bills — a broader measure to create a new market structure for cryptocurrency and a bill to prohibit the Federal Reserve from issuing a new digital currency — will be considered by the Senate later.
How stablecoin is being regulated in the US
The stablecoin bill, called the "Genius Act", sets initial guardrails and consumer protections for the cryptocurrency, with reserve requirements, audits, and compliance.
Stablecoins are digital tokens tied to a stable asset, often the US dollar, to reduce price volatility.
"Around the world, payment systems are undergoing a revolution," said House Financial Services Chair French Hill of Arkansas as lawmakers debated the stablecoin legislation Thursday morning. Hill said the bill will "ensure American competitiveness and strong guardrails for our consumers."
The stablecoin measure is seen by lawmakers and the industry as a step toward adding legitimacy and consumer trust to a rapidly growing sector. US Treasury Secretary Scott Bessent said in June that the legislation could help that currency "grow into a $3.7 trillion (€3.2tr) market by the end of the decade."
The bill outlines requirements for stablecoin issuers, including compliance with US anti-money laundering and sanctions laws, and mandates that issuers hold reserves backing the cryptocurrency.
Without such a framework, Republicans on the Senate Banking Committee warned in a statement, "consumers face risks like unstable reserves or unclear operations from stablecoin issuers."
After the votes, House Republicans strongly urged the Senate to take up the second bill, which would create a new market structure for cryptocurrency.
That legislation aims to provide clarity for how digital assets are regulated. The bill defines what forms of cryptocurrency should be treated as commodities regulated by the Commodity Futures Trading Commission and which are securities policed by the Securities and Exchange Commission. In general, tokens associated with "mature" blockchains, like Bitcoin, will be considered commodities.
The third bill, passed in the House on a narrower 219-210 margin, prohibits the US from offering what is known as a "central bank digital currency," which is a government-issued form of digital cash.
Why the US needs crypto regulation
The crypto industry has long complained that unclear laws have made it difficult to operate in the US and that the Biden administration attempted to regulate it through enforcement actions rather than transparent rulemaking.
Passing this bill has been a top priority for the industry, which has quickly become a major player in Washington, thanks to substantial campaign donations and lobbying efforts.
Patrick McHenry, the former chair of the House Financial Services Committee and now vice chair of the crypto firm Ondo Finance, said the legislation will have a "massive generational impact," similar to the securities laws Congress passed in the 1930s that helped make Wall Street the centre of the financial world.
"These bills will make the United States the centre of the world for digital assets," he said.
While the bill has significant bipartisan support, it has also faced pushback from Democrats who argue that the legislation should address Trump's personal financial interests in the cryptocurrency space.
A provision in the stablecoin bill bans members of Congress and their families from profiting off stablecoins. But that prohibition does not extend to the president and his family.
According to Forbes, the president's crypto holdings are worth more than any single real estate asset in his portfolio, an estimated $1 billion (€860 million).
The Republican president's family holds a significant stake in World Liberty Financial, a crypto project that launched its own stablecoin, USD1.
Trump reported earning $57.35 million (€49.2 million) from token sales at World Liberty Financial in 2024, according to a public financial disclosure released in June.
Some Democrats also criticised the bill for creating what they see as an overly weak regulatory framework that could pose long-term financial risks. They have also raised concerns that the legislation opens the door for major corporations to issue their own private cryptocurrencies.
"If this bill passes, it will allow Elon Musk and Mark Zuckerberg to issue their own money. The bill still permits Big Tech companies and other conglomerates to issue their own private currencies," said Massachusetts Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee.
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