Congress Prepares Three Crypto Bills for July 14 Crypto Week

Lawmakers in Washington are preparing to address three significant bills related to the blockchain industry during an event dubbed “crypto week.” The US Congress has been working on legislation aimed at bringing clarity to the crypto industry and fostering its growth, primarily through two laws governing stablecoins and establishing a crypto market structure. Additionally, Congress is considering a law to prevent the creation of a central bank digital currency (CBDC).

Crypto has garnered support from both Democratic and Republican lawmakers, each making numerous amendments to the bills under consideration. Major crypto exchanges operating in the United States, such as Coinbase, have also intensified their lobbying efforts for the legislation.

With Congress set to take action on three critical bills during Crypto Week, here’s an overview of what they are considering and the implications for the crypto industry. The US House Financial Services Committee announced that Crypto Week would commence on July 14, focusing on three key bills: the Digital Asset Market Clarity Act (CLARITY Act), the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), and the Anti-CBDC Surveillance State Act.

The CLARITY Act, introduced by Republican Representative French Hill at the end of June, aims to provide a framework for the digital assets industry. It seeks to define the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The bill proposes an exemption from the Securities Act of 1933’s registration requirement for offers of investment contracts involving digital commodities on mature blockchains that meet certain conditions. It defines “mature” blockchains as networks with a digital commodity “substantially derived from the use and functioning of the blockchain,” without user restrictions and limiting certain holders to less than 20% of ownership. Under the bill, the CFTC would gain “exclusive regulatory jurisdiction” over crypto transactions, requiring exchanges and brokers to register with the commission and comply with regulatory considerations.

The GENIUS Act, introduced in February by a bipartisan group of legislators, provides a regulatory framework for stablecoins. It defines the types of entities that may issue stablecoins and requires issuers to maintain reserves backing the stablecoin on a one-to-one basis using US currency or other similarly liquid assets. The bill also subjects issuers to the Bank Secrecy Act and sets provisions for the event of a stablecoin issuer going insolvent. The GENIUS Act has undergone significant debate and revision, with provisions addressing concerns over terrorism financing and money laundering. Senator Cynthia Lummis, one of the bill’s sponsors, noted that the Senate has included provisions to address Democratic concerns. Senator Kirsten Gillibrand praised the bill for targeting illicit finance, placing limitations on Big Tech, and strengthening national security.

The Anti-CBDC Surveillance State Act, introduced by Republican Representative Tom Emmer on March 6, seeks to prevent the Federal Reserve from issuing a CBDC. The act forbids the Fed from issuing a CBDC either by itself or through a third party, prevents the Fed from using a CBDC to influence monetary policy, and gives Congress the sole authority to issue a digital dollar. Supporting organizations include the Blockchain Association, the Digital Chamber of Commerce, and various banking lobbies.

Given the complexity and economic implications of these bills, passing three laws in one week is a challenging task. Major crypto companies like Coinbase have been actively lobbying for the legislation. On July 7, Stand With Crypto, a grassroots crypto lobbying organization started by Coinbase, sent a letter to lawmakers signed by 65 executives from various crypto firms, urging Congress to pass the CLARITY Act. Coinbase CEO Brian Armstrong also expressed support, stating that “America is ready for crypto.” However, the CLARITY Act has faced criticism from lawmakers and consumer protection organizations, who argue that it is a “crypto crash grab” and a means for companies to avoid SEC regulation. Americans for Financial Reform (AFR) called the bill a “massive deregulatory bill” backed by campaign cash and lobbying from venture capital firms and crypto billionaires. Senator Elizabeth Warren, a noted crypto critic, opposed the bill, stating that it allows major firms to skirt SEC regulation.

The GENIUS Act has experienced more debate and revision, with provisions addressing concerns over terrorism financing and money laundering. Despite concerns about the potential effect on dollar dominance and treasury markets, betting markets are optimistic about the bill’s chances of passing. The anti-CBDC bill is still under deliberation, with a hearing scheduled on July 16 to address aspects related to Emmer’s bill. Whether pro-crypto lawmakers can pass three laws in a week remains uncertain, but their focus on crypto in the near future is clear.