House Considers Merging GENIUS Act with CLARITY Act for Crypto Regulation

The U.S. House of Representatives is contemplating the merger of the GENIUS Act with the CLARITY Act to establish a comprehensive regulatory framework for cryptocurrencies. This strategic move is designed to address the regulatory gaps and systemic risks associated with stablecoins, while also enhancing consumer protection and national security.

The GENIUS Act, which was passed by the Senate on June 17, 2025, with a bipartisan vote of 68-30, aims to create a clear legal pathway for stablecoin innovation. It defines "payment stablecoins" as digital assets intended to maintain a stable value relative to a fixed amount of U.S. dollars or similarly liquid assets, designed for use as a means of payment or settlement. The Act outlines specific categories of permitted payment stablecoin issuers, including subsidiaries of insured depository institutions, federal qualified payment stablecoin issuers, and state qualified payment stablecoin issuers. These issuers are subject to stringent reserve and redemption requirements, ensuring full reserve backing and prohibiting the rehypothecation of reserve assets. The Act also mandates monthly disclosures of reserve composition and annual audited financial statements for issuers with over $50 billion in market capitalization.

In terms of regulatory oversight, the Act assigns federal and state roles based on the issuer's market capitalization, with federal oversight for issuers over $10 billion and state-level regulation for smaller issuers. The Act further outlines consumer protection measures, including marketing restrictions and operational limits, to prevent misuse of reserve assets and high-risk financial activities. Anti-money laundering (AML) compliance and national security measures are also emphasized, requiring issuers to implement AML programs and comply with lawful orders. The Act introduces civil and criminal penalties for unlicensed issuance of stablecoins and material violations by licensed issuers, ensuring robust enforcement mechanisms.

Tom Emmer, a key House leader, has suggested that the success of the GENIUS Act in the House may depend on its alignment with the CLARITY Act. The CLARITY Act, officially known as the Digital Asset Market Clarity Act of 2025, has already passed the House Financial Services Committee and is awaiting a full House vote. Emmer believes that combining the two bills will provide a full and clear structure for crypto in the country, giving guidelines on how all kinds of crypto and digital assets should be used, bought, or traded in the U.S.

However, President Donald Trump has urged the House to pass the GENIUS Act quickly, without any additions. Some lawmakers are concerned about Trump’s crypto ties, especially with World Liberty Financial’s stablecoin project. To limit the involvement of political leaders in the crypto space, Senator Adam Schiff introduced the COIN Act on June 23. This bill aims to stop presidents and their families from making money through crypto while holding office.

If these laws pass, the U.S. could finally fix the messy patchwork of rules that make it hard for new crypto companies to start. Right now, a company has to follow different rules in every state, which is expensive and slow. With one national rule, it could be much easier for new ideas to grow—and for consumers to use digital money safely.

The next steps involve the House of Representatives reviewing the GENIUS Act and potentially forming a conference committee to reconcile it with the House's STABLE Act. Once reconciled, the final bill will require separate approval by both chambers before being sent to the President for signature. This legislative process represents a significant shift in U.S. financial regulation, aiming to foster innovation in the stablecoin sector while safeguarding the integrity of the financial system.