The House has passed a tranche of landmark cryptocurrency bills, including legislation expected to be the first major crypto regulatory measure ever signed into law.
The House voted on Thursday to pass the Digital Asset Market Clarity Act, the Anti-Central Bank Digital Currency Surveillance State Act, and the Guiding and Establishing National Innovation for U.S. Stablecoins Act. The votes come after a multiday conservative Republican revolt meant to secure language barring the creation of a central bank digital currency.
The GENIUS Act, which establishes a regulatory framework for payment stablecoins, passed in a 308-122 vote, with 102 Democrats joining Republicans. A dozen Republicans voted against it. The legislation already passed the Senate in a bipartisan 68-30 vote, so it will now head to President Donald Trump’s desk to be made into law.
The CLARITY Act, which establishes a regulatory framework for digital commodities, was approved 294-134, with 79 Democrats voting in favor.
The Anti-CBDC Surveillance State Act, which would prohibit the government from issuing a central bank digital currency, was passed 219-210, with two Democrats voting alongside Republicans.
The legislation is a big deal given just how enmeshed the crypto world has become in politics. Trump ran on being the first crypto-friendly president, and donors poured money into the 2024 election, a sign of the ascendant power of the crypto electorate.
While it initially appeared that the bills would be smooth sailing, a group of Republicans staged a rebellion, demanding specific assurances that CBDCs would be banned and that there was a path for the provision to become law.
The drama included the longest roll call vote in the House’s history and ended with Republican leadership agreeing to include text barring CBDCs in separate legislation, the National Defense Authorization Act, later this year.
The GENIUS Act is the splashiest of the legislation approved on Thursday, in large part because it was already approved by the upper chamber and is set to be the first major crypto regulatory measure signed into law. It also has the backing of key industry groups and would set guidelines for a large swath of the cryptocurrency market.
Establishing a regulatory framework for stablecoins has long been a priority for crypto advocates on Capitol Hill.
Stablecoins, while a form of cryptocurrency, differ from traditional crypto assets such as bitcoin and ethereum. They now make up a market worth hundreds of billions and tie their value to an underlying asset, such as gold or fiat currency. The backing of assets is meant to ensure they don’t wildly fluctuate in value.
To maintain a stable value against the underlying asset, stablecoins are meant to be backed by reserves. So, if a stablecoin were to be tied one-to-one with the dollar, the entity behind that stablecoin should have $10 million in cash reserves in a bank as backing for 10 million stablecoins.
The GENIUS Act says that only those permitted may issue payment stablecoins in the United States and provides guidelines for what is considered a permitted regulated issuer. Those issuers can choose whether to be regulated by a state or federal issuer, but only stablecoin issuers of $10 billion or less can be regulated by states.
Additionally, the legislation requires stablecoin issuers to maintain one-to-one reserves with the backing asset.
The CLARITY Act is an attempt at crypto market structure. It sets guidelines for when a crypto asset is considered a security, thus regulated by the Securities and Exchange Commission, and when it is a commodity regulated by the Commodity Futures Trading Commission.
“It creates a pathway for a kind of crypto that is being issued as part of a securities transaction to be able to do so. And it creates oversight and regulatory authorities over the crypto commodity trading market, and gives most of that to the CFTC,” Jennifer Schulp, director of financial regulation studies at the Cato Institute, told the Washington Examiner.
The legislation also mandates that digital commodity exchanges, brokers, and dealers are subject to anti-money laundering provisions in the Bank Secrecy Act.
Getting market structure legislation signed into law would be significant, as the rules currently surrounding crypto can be inconsistent and confusing.
The Anti-CBDC Surveillance State Act would definitively ban CBDCs in the U.S.
A CBDC is a form of digital currency issued by a central bank — in the U.S.’s case, the Federal Reserve. If there were a CBDC, consumers could use digital money issued directly by the Fed in addition to physical money. Proponents of a CBDC argue that a centralized dollar would help prevent bank bailouts and increase efficiency.
Opponents contend that it could give the Fed too much power or could raise Fourth Amendment concerns, depending on how much control the government would have over individual accounts.
Rep. Byron Donalds (R-FL) told the Washington Examiner that he has high hopes that the anti-CBDC legislation will make it to Trump’s desk.
“We’re all for digital assets, but the Fed does not need to be in that business, and there are major privacy concerns,” Donalds, a member of the Financial Services Committee, said. “In short, do the American people really trust that the Fed’s not going to know what’s going on in their transactions?”
The legislation specifically bans the Fed from offering CBDC and prohibits the central bank from using digital dollars to implement monetary policy, conduct studies, or test CBDC, although it has some exceptions.
CBDCs have become a sticking point for some conservative groups. For instance, Heritage Action issued a “key vote” notice for the bill, meaning members who vote against the legislation would have it marked against them in the group’s ratings for lawmakers.
The Fed has notably already done some research into a CBDC.
In 2022, the Federal Reserve Bank of New York and major banks announced the launch of a three-month test of a digital dollar that tried to study its viability.
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That same year, the Fed took its first step toward weighing the use of a CBDC when it released a discussion paper and opened a four-month public comment period to receive input.
But the anti-CBDC legislation, which might have trouble passing the Senate, is likely to be moot because of Republican rebellion this week, which resulted in assurances from GOP leadership that there would be a provision banning CBDCs in the NDAA.
