UPDATED The US Congress passed its first standalone cryptocurrency bill on Thursday, marking a major milestone for the industry.
GENIUS Act
The GENIUS Act, which previously rolled through the US Senate, was approved by a vote of 308 lawmakers in favour, and 122 against in the US House of Representatives. The bill's passage was stymied earlier this week by a group of Republicans who questioned whether the legislation was adequately drafted to block a US central bank digital currency.
GENIUS was named the Guiding and Establishing National Innovation for US Stablecoins Act in order to create the GENIUS acronym that President Trump likes.
It will now be sent to President Trump, which he is expected to sign with his usual thick black marker pen. The President has been a personal champion of the GENIUS Act, a comprehensive bill which will set a regulatory framework for the stablecoin industry and support American businesses focused on digital assets.
First, it will create a federal licensing system for stablecoin issuers. Already, commercial giants Walmart and Amazon have expressed an interest in creating their own stablecoins, as businesses move to explore the growth and application of digital assets within the financial system.
The legislation also establishes strict consumer protection rules, which was a requirement that Congressional Democrats included in the final bill.
Under the GENIUS protocol, issuers must:
- Hold 100% reserves in liquid assets like cash or Treasury bills.
- Provide monthly public disclosure of reserves.
- Grant full redemption rights for stablecoin holders.
After the bill passed, Republican lawmakers were quick to praise the legislation as a crucial national security measure for the United States.
“The GENIUS Act marks a major milestone in securing America’s leadership in payments innovation while protecting consumers and strengthening our national security,” Said Tim Scott, Chairman of the Senate Banking Committee.
Positive market reaction
Bitcoin gained immediately after the US House passed the GENIUS Act on Thursday at 08:00 PM UTC, but the price largely held steady just below $120,000 over Thursday and Friday trading.
XRP rose to a record above $3.60, while Ether (ETH) and the President’s memecoin TRUMP also advanced.
Circle (CRCL) the publicly listed stablecoin issuer, has seen its stock price fluctuate rapidly throughout Crypto Week. The stock fell 4.6% on Tuesday following a procedural hiccup which delayed a vote on the GENIUS Act, before rallying 19% Wednesday after signs of progress.
The legislation marks a major development for the company. “It signals strong bipartisan support for responsible innovation and sends a clear message that the U.S. will lead in the regulation of dollar-backed payment stablecoins,” Circle CEO Dante Disparte said in a statement.
Two bills head to the Senate
Lawmakers in the House also approved two major crypto bills. The Digital Asset Market Clarity (CLARITY) Act, which will establish a market framework for cryptocurrencies, and the Anti-CBDC Surveillance State Act were voted through. Both pieces of legislation will now head to the US Senate for deliberation and voting.
The Clarity Act establishes clear legal definitions for digital assets and blockchain-related terms to reduce regulatory confusion. It also divides responsibilities for market oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) based on how digital assets are used—investment-related assets fall under the SEC, while decentralized, utility-focused assets are regulated by the CFTC.
SEC or CFTC
In summary, it:
- Defines regulatory boundaries between the SEC and CFTC by distinguishing when a digital asset is a security versus a commodity.
- Creates a path for token decentralization, allowing digital assets to transition from being securities to commodities over time.
- Establishes disclosure and compliance requirements for digital asset issuers and trading platforms to protect investors and establish market transparency.
This oversight delineation matters. For many years the crypto industry has operated within a so-called “grey-zone” in the regulatory space. CLARITY seeks to end this by clearly defining oversight roles between the SEC and CFTC.
The anti-CBDC act bars the Federal Reserve from issuing or testing a central bank digital currency (CBDC) to individuals, directly or through intermediaries, and prohibits using CBDCs for monetary policy or without explicit Congressional approval.
Republican lawmakers have singled out CBDCs as taboo within the digital asset world, claiming that their issuance would harm Americans' financial privacy and led to government overreach. In their view, CBDCs may allow the government to block individual transactions and track private citizens through the creation and delivery of federal digital currency.
Dissent remains
Not all lawmakers in the US are onboard with the excitement that has accompanied crypto week. Many prominent Democrats, including Maxine Waters, who holds an influential role on the House Financial Services Committee, views the legislation in its current form as “absurd” and “dangerous” for America’s financial integrity and self-serving to the Trump family.
In addition to branding GENIUS “the UNSTABLE Act” in her House floor speech, she warned in an opinion article published by US media outlet MSNBC that the legislation fails to provide adequate consumer protection and creates structural weaknesses that may trigger financial meltdown.
“If these bills become law, America will eventually face its first crypto financial crisis.” She wrote. “And when that happens, my Republican colleagues will likely point fingers at everyone but themselves, just as they’ve always done, and say they had no idea this could happen.”
