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Legislative Setback for Crypto Bills in the US House of Representatives
The US House of Representatives faced a significant setback this week with a vote that failed to advance key cryptocurrency legislation, including the GENIUS and Clarity Acts, as well as the fiscal year 2026 Defence spending measure. The vote, which concluded with a tally of 196 to 223 against a procedural rule for debate on the bills, halted what was anticipated to be a pivotal moment during the Republican-led “Crypto Week”. Earlier hopes for a re-vote were dashed when it was confirmed that no further votes would take place that day.
Key Reasons for the Failed Vote
The failure of the vote can largely be attributed to dissent within the Republican ranks, particularly from members of the House Freedom Caucus. These conservative lawmakers expressed strong opposition to the GENIUS Act, which had already secured Senate approval. This legislation proposes stringent regulations for stablecoins, mandating that issuers maintain reserves in US dollars or equivalent highly liquid assets and conduct audits for those whose assets exceed US$50 billion (approximately AU$76.7 billion).
A notable voice in the opposition was Representative Marjorie Taylor Greene, who critiqued the bill for not aligning with former President Trump’s executive order aimed at banning central bank digital currencies (CBDCs). Additionally, the refusal of House Speaker Mike Johnson to permit amendments to the bills further fueled the rebellion among conservatives, ultimately stalling the broader legislative agenda for digital assets.
"People, including the House Freedom Caucus, believe that central bank digital currency – we have to put a stake in its heart once and for all, and the action under that rule wouldn’t have done it," stated Andy Harris, Chair of the House Freedom Caucus.
Uncertainty Surrounding the Future of Crypto Regulation
The Clarity Act aims to create a more defined regulatory framework for cryptocurrencies by clarifying the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), while also establishing transparency requirements for digital asset firms. Despite bipartisan backing, there are reports that Senate leaders are contemplating drafting an alternative version, which might diverge from the House’s proposals, particularly regarding decentralisation assessments.
Industry representatives are concerned that certain provisions within the Clarity Act may potentially disadvantage decentralised finance platforms and restrict self-custody rights. While some lobbyists view it as progress, they are advocating for clearer definitions and more inclusive exemptions prior to any Senate action.
Impact on Defence Funding
Furthermore, the cancellation of the vote obstructed progress on a critical US$9.4 billion (AU$14.4 billion) clawback provision linked to the fiscal 2026 Defence appropriations bill. This provision, which requires congressional approval by Friday to remain effective, was tied to the same procedural rules governing the stalled crypto bills. As a result, lawmakers are currently engaged in closed-door negotiations to resolve both the funding issues and the legislative deadlock.
The failure to move forward with these bills is a significant blow not just to crypto legislation but also raises questions about the broader financial landscape in the US as key discussions surrounding defence spending and digital asset regulation remain unresolved.
In conclusion, the recent developments in Congress underscore the complications surrounding the evolving regulatory landscape for cryptocurrencies. As lawmakers work to address these challenges, the urgency for resolution grows, particularly with looming deadlines for critical funding requirements. The path forward remains uncertain as the House grapples with internal divisions and the broader implications for the cryptocurrency sector.
