Zhitong Finance APP learned that the U.S. encryption industry ushered in a major victory on Thursday. The House of Representatives passed a landmark bill with a vote of 308 in favor and 122 against to formulate regulatory rules for "stable coins." This marks that digital assets are gradually entering the mainstream financial system.
The bill, called the Genius Act, was passed by the Senate as early as June, and the White House said on Thursday that President Trump is expected to sign the bill into law on Friday.
The bill has been a core target of years of lobbying by stablecoin issuer Circle (CRCL) and crypto trading platform Coinbase (COIN.US). The passage of the bill is the epitome of the crypto industry’s years of political mobilization and donations to support lawmakers with pro-crypto stances.
Crypto supporters generally believe that this bill and several other crypto legislation being considered by Congress will open up broader development space for the industry, especially attracting more institutional investors.
News of the bill comes as Bitcoin prices have been essentially flat over the past 24 hours, trading around $119,400. However, most other mainstream cryptocurrencies rose, with Ethereum rising by 1.5% and Ripple rising by 9.4%. Dogecoin gained 2%, while Solana was flat. In the past seven days, ETH and XRP have gained 23% and 33% respectively, while Bitcoin has also gained 6.4%.
Although the "Genius Act" is expected to be implemented soon, the encryption industry still has many unfinished ambitions. In particular, market structure legislation for crypto exchanges, brokers and tokens is the focus of the industry in the next stage.
It is worth noting that the House of Representatives also passed a broader “Market Structure Act” (CLARITY Act) on Thursday by a vote of 294 to 134 to establish complete regulatory rules for the crypto market. Among them, 78 Democratic congressmen voted in favor, exceeding the number of Democrats who supported a similar bill last year (71), showing that support is rising.
However, unlike the stablecoin bill, the market structure bill has not yet been voted on in the Senate. Analysts say the Senate is still some way off from assembling the bipartisan coalition needed to break through the filibuster.
TD Cowen analyst Jaret Seiberg wrote in a research note this week: "The passage of the bill is very important in a symbolic sense, but the real key is what kind of language the Senate will ultimately pass it." He does not expect the Senate to have a clearer draft bill before the end of this year or even early next year.
There are two reasons for the slow progress in the Senate. The first is the issue of consensus. While some senators have been pushing legislation for years, the Senate as a whole lags far behind the House in building consensus. Former Senate Banking Committee Chairman and Democrat Sherrod Brown has long been skeptical of encryption and has repeatedly blocked related bills from advancing.
The second is substantive differences. Several Democratic senators, including Elizabeth Warren, worry that the bill will undermine existing investor protection mechanisms and hand enforcement responsibilities to the Commodity Futures Trading Commission (CFTC), which is severely understaffed and inexperienced. They believe that existing securities regulations are sufficient to regulate the industry.
Additionally, Trump’s own involvement in the crypto industry casts a shadow over the legislation. The stablecoin bill was nearly stalled in the Senate because some Democratic lawmakers were concerned that the bill failed to prohibit the president or other government officials from profiting from it. According to ethics disclosure documents, the Trump family holds shares in crypto company World Liberty Financial, which has brought it more than $57 million in revenue from token sales and launched its own stablecoin this year. In the future, some Democratic lawmakers may push for additional restrictions in the new bill to prohibit the president and his relatives from benefiting from it.
The new chairman of the Senate Banking Committee, Republican Tim Scott, began holding hearings on the relevant legislation last week, but it is expected to take several months to write a bill that can win the support of at least seven Democratic lawmakers and thereby bypass the obstruction process.
At the same time, the U.S. House of Representatives also passed another important bill, the “Anti-CBDC Anti-Surveillance State Act.” The bill seeks to prevent the Federal Reserve from issuing or testing a central bank digital currency without congressional approval. The final vote was 219 votes in favor and 217 votes against.
Central bank digital currency is different from decentralized cryptocurrencies such as Bitcoin. It is directly issued and managed by the central bank and is programmable and highly controllable. Some critics worry that it will become a means for the government to strengthen currency and citizen privacy control.
Other news pointed out that Trump is preparing to open the US$9 trillion US retirement market to cryptocurrency investment, gold and private equity. This move will stimulate a fundamental change in the way Americans manage their savings.
Trump is expected to sign an executive order this week to open up 401k plans to alternative investments beyond traditional stocks and bonds, three people familiar with the president's plans said. The investments will span a wide range of asset classes, from digital assets to metals, as well as funds focused on corporate buyouts, private loans and infrastructure deals. The executive order will direct Washington regulators to investigate remaining obstacles needed to allow such alternative investments to be included in professionally managed funds used by 401k savers, people familiar with the matter said.
