U.S. House Reopens Debate on Crypto Regulation Bills Amid Republican Divisions

The U.S. House of Representatives is currently engaged in a significant debate over the CLARITY Act, a piece of legislation that aims to provide a structured regulatory environment for digital assets. This act is part of a broader legislative package that includes the GENIUS Act and the Anti-CBDC bill. The House initially passed a motion to reconsider the package, which reopened the path for debate on these critical pieces of legislation. However, the process has been fraught with challenges, particularly due to internal divisions within the Republican Party.

The Anti-CBDC bill, which seeks to prohibit the creation of a Central Bank Digital Currency (CBDC), has been a focal point of contention. While the House passed three bills, including the CLARITY Act, the GENIUS Act, and the Anti-CBDC bill, the Senate opposition and internal party disagreements have stalled progress. The House's narrow approval of these bills marks a significant moment in U.S. crypto regulation, but the lack of bipartisan support has complicated the legislative process.

The procedural vote on H. Res. 580, which sets the terms for debating the legislative package, has been particularly contentious. The vote remained open for over four hours, with Republican leaders working to secure additional support from party holdouts. As of the latest count, 220 lawmakers voted against the measure, while 209 voted in favor. This deadlock has persisted despite President Trump's active push for the GENIUS Act's passage, including hosting a closed-door meeting with House Republicans.

The internal rift within the Republican Party over anti-CBDC provisions has further complicated the situation. After meeting with Trump, some Republicans changed their votes to support the measure, hoping for anti-CBDC provisions to be included in the CLARITY Act. However, the authors of the CLARITY Act—Reps. French Hill, Bryan Steil, and GT Thompson—have shown strong resistance to modifying the bill. They warn that including anti-CBDC language or merging it with the GENIUS Act could jeopardize the bipartisan coalition supporting the CLARITY Act.

The House's approval of a motion to reconsider the crypto-related proposals package on July 16 has kept the debate alive, but the prospects for these bills in the Senate remain uncertain. The GENIUS Act, CLARITY Act, and Anti-CBDC Act could not proceed in a previous vote, ending 196-222. Lawmakers are now preparing for another round of voting as momentum builds for these critical pieces of legislation. The ongoing debate highlights the complex landscape of crypto regulation in the U.S., with lawmakers grappling with the implications of CBDCs and the need for clear regulatory frameworks.

The CLARITY Act, if passed, would define the regulatory path for digital assets, splitting oversight duties between the CFTC and SEC for different asset classes. This includes defining certain cryptoassets such as ETH and BTC as commodities under CFTC regulation. The act proposes a clear regulatory regime affecting large-cap altcoins, DeFi protocols, and stablecoins with potential market structure changes. It aims to ensure that the U.S. remains a leader in digital asset development, putting new compliance requirements on exchanges and custodians to meet AML standards.

The involvement of key legislators underlines the political commitment to digital asset regulation, with potential impacts on cryptocurrency markets. Structural changes will affect key cryptocurrencies and exchange compliance frameworks. Similar legislative moves in the past have paved the way for increased institutional engagement. The outcome may influence the crypto industry's future course, with broad implications across finance, technology, and policy landscapes. As Bryan Steil stated, "These pieces of legislation are vital to ensuring America is at the forefront of innovation in the digital asset space. I look forward to 'Crypto Week' to pass the CLARITY Act and the Senate’s GENIUS Act, and to prevent a central bank digital currency so America can be the leader in digital asset development."