Crypto Bills Face House Hurdle, Trump Influence Sways Vote

Several cryptocurrency-related bills, including the GENIUS Act, the CLARITY Act, and a proposal to prevent the Federal Reserve from creating a central bank digital currency, faced a procedural hurdle in the House of Representatives. The bills, which had the backing of President Donald Trump, were initially blocked by a group of House conservatives during a vote on Tuesday. The motion to advance the legislation was defeated with 196 votes against and 223 votes in favor, with 13 Republicans joining Democrats in opposition. This vote marked a rare instance where House Republicans did not follow Trump's direction, at least temporarily.

The GENIUS Act aims to regulate stablecoins and had previously passed the Senate with some Democratic support. The CLARITY Act seeks to establish clear rules for whether an asset is regulated as a security by the Securities and Exchange Commission or as a commodity overseen by the Commodity Futures Trading Commission. The third proposal aims to prevent the Federal Reserve from creating a central bank digital currency, a contentious issue among lawmakers.

Despite the initial setback, President Trump announced later in the day that the Republican holdouts had agreed to vote in favor of the rule after a short discussion. Trump, who had previously hailed "Crypto Week" and urged all House Republicans to vote "yes" on the measure, expressed optimism that the bills would clear the procedural hurdle the following day. This dramatic turnaround highlighted Trump's influence over the Republican conference, as the holdouts reversed their positions following a White House meeting.

The failure of the procedural vote had initially caused a dip in crypto-linked stocks. However, the subsequent reversal by the holdouts provided a glimmer of hope for the crypto industry, which had been anticipating a series of legislative wins. The bills are now expected to go to the House floor for a vote, with House Majority Leader indicating that he anticipates votes on all three cryptocurrency bills that Republicans are pushing. The outcome of these votes will be crucial in determining the future regulatory landscape for digital assets in the United States.

This event underscores the complex dynamics within the Republican Party and the influence of the President on legislative processes. The initial resistance from House conservatives and the subsequent reversal highlight the internal debates and power struggles within the party. The outcome of the votes on these bills will have significant implications for the regulation of digital assets, potentially shaping the future of the crypto industry in the United States.