Crypto Regulation Delayed as Lawmakers Add Irrelevant Items to Bills

US Representative Bryan Steil has urged his colleagues to exercise restraint in adding non-relevant items to key cryptocurrency bills, asserting that such actions are impeding the development of a regulatory framework for the industry. Steil, a Republican from Wisconsin and chair of the House Financial Services Subcommittee on crypto, made these remarks at a conference in Las Vegas on May 27. He highlighted the importance of lawmakers avoiding the attachment of unrelated items to legislation, a practice he believes is delaying the implementation of necessary regulations.

Steil's call for restraint comes as Congress aims to pass two significant crypto bills before the August recess: the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) and a crypto market structure bill. The GENIUS Act, which focuses on regulating stablecoins, faced a setback when Democratic lawmakers withdrew their support on May 8 due to concerns about potential conflicts of interest involving US President Donald Trump's crypto ventures. Despite these concerns, the GENIUS Act advanced in the Senate with a procedural vote on May 20.

Steil argued that the concerns about Trump's involvement are not relevant to the legislative text, which is centered on establishing a regulatory framework to benefit American consumers and foster innovation. He also credited Democratic lawmakers for their efforts to understand the crypto industry's grievances regarding the Biden administration's regulatory approach. Over 70 Democrats in the previous Congress supported the need for clear crypto rules when the Financial Innovation and Technology for the 21st Century Act (FIT21) passed the House in May 2024.

The FIT21 Act, however, was not enacted before the end of the last Congress. House Agricultural and Financial Services Committee chairs Glenn Thompson and French Hill introduced a new crypto market structure bill on May 5, aiming to build on the FIT21 Act. If these bills are passed, lawmakers will have the opportunity to explore additional innovative ideas in the crypto space, according to Steil.

Democratic Senator Mark Warner echoed Steil's sentiments, stating that the US cannot afford to remain on the sidelines as the crypto industry evolves. Warner emphasized the importance of shaping blockchain technology in a way that aligns with American interests and democratic values. He acknowledged that while there are concerns about corruption, the broader reality is that blockchain technology is here to stay, and American lawmakers must play a role in its development.

Steil's remarks underscore the complex political landscape surrounding cryptocurrency regulation in the US. The push for clear and effective regulatory frameworks is essential for the growth and stability of the crypto industry. However, the inclusion of non-germane items in legislation can slow down this process, as lawmakers become distracted by unrelated issues. Steil's call for restraint is a reminder that a focused and bipartisan approach is necessary to achieve meaningful progress in this area.

The upcoming August recess provides a critical window for Congress to pass the GENIUS Act and the crypto market structure bill. If successful, these legislative efforts could pave the way for a more robust regulatory environment, benefiting both consumers and the industry as a whole. The collaboration between Republican and Democratic lawmakers, as highlighted by Steil, is crucial for navigating the challenges and opportunities presented by the evolving crypto landscape.