US Congress Passes Landmark Crypto Bills, GENIUS Act Heads to White House

The US Congress has concluded its Crypto Week with significant developments in cryptocurrency legislation. The House of Representatives passed the GENIUS Act, a landmark stablecoin bill, and sent it to the president's desk for signature. The bill received bipartisan support after several rounds of revisions, marking a pivotal moment for the US crypto industry.

The House also passed the CLARITY Act, a market structure bill championed by the blockchain industry, and a bill sponsored by Republican Representative that would ban the Federal Reserve from issuing a central bank digital currency (CBDC). These two bills will now proceed to the Senate, where they may face further deliberation and amendments due to the slimmer pro-crypto Republican majority.

The GENIUS Act, now heading to the White House, is expected to be signed by US President Donald Trump. The law will come into effect 18 months after the signature or 120 days after the final regulations are published by the US Treasury and Federal Reserve. Once in full effect, stablecoin issuers will be held to strict reserve requirements and subject to the Bank Secrecy Act.

Logan Payne, a crypto-focused lawyer, previously noted that the GENIUS Act will compel many American stablecoin issuers to become banks. Stablecoin issuers under this act are limited solely to that activity, which may prompt them to pursue a bank charter to offer a wider range of services without needing state-to-state licenses.

The crypto industry did not achieve all its goals with the GENIUS Act. Coinbase CEO Brian Armstrong advocated for a provision allowing stablecoin issuers to offer interest on customer stablecoin reserves, arguing that it would democratize access to market rate yields. However, the final version of the bill did not include this provision.

Additionally, the bill stipulates that three years after its signing, no foreign stablecoin issuers not approved in the US will be able to offer a stablecoin in the country, with some exceptions if the US Treasury deems the issuer's country of origin has a comparable regulatory regime.

The CLARITY Act and the Anti-CBDC bill are now headed to the Senate. The CLARITY Act aims to exempt "digital commodities on mature blockchains" from the Securities Act of 1933 and transfer regulatory oversight from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC). Despite criticism from some House Democrats, the act received significant bipartisan support.

Senate Democrats who supported the GENIUS Act may also back the CLARITY Act, despite vocal opposition from crypto-skeptic Democrats. The vote on the Anti-CBDC bill was closer, reflecting a more partisan divide on whether the Fed should issue a digital dollar. The bill's sponsor criticized CBDC as "insidious technology" that undermines privacy values.

If a few Senate Democrats vote for the Anti-CBDC bill, it could pass, given that a recent poll found that 22% of Democrats oppose a CBDC. The crypto industry is optimistic about these developments, viewing them as a significant step toward full integration of crypto into the US financial system.

Crypto leaders believe these bills could influence global crypto policies. Nathan McCauley, CEO of Anchorage Digital, highlighted the importance of the CLARITY Act for market transparency and integrating crypto into traditional finance. James Harris, group CEO at crypto lending firm Tesseract, noted that US policy often sets a global precedent and that delays could cede advantage to other regions.

With more politicians becoming pro-crypto, the passage of these bills seems more a matter of "when" than "if." The crypto industry is poised for significant growth and integration into the mainstream financial system, marking a new era in digital asset regulation and adoption.