US House votes on crypto legislation, sending stablecoin GENIUS act to Trump’s desk, Clarity to Senate

U.S. House lawmakers have passed landmark cryptocurrency legislation to create a federal regulatory framework for stablecoins and write rules for the digital asset industry at large. 

The U.S. House of Representatives took three votes on Thursday — the Digital Asset Market Clarity Act, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS Act). The House is now on the third vote for the Anti-CBDC Surveillance State Act. 

The House voted 294- 134 for the Clarity Act on Thursday. That bill takes a whole-of-crypto approach to regulating the industry and would create a regulatory framework for crypto in part through designating how the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission will regulate. 

Clarity also requires digital asset firms to provide retail financial disclosures and segregate corporate and customer funds. Crypto proponents say clear rules are needed to protect consumers and unlock innovation.

The market structure bill will now head to the Senate. 

Crypto Council for Innovation CEO Ji Hun Kim called the passage of Clarity a "milestone," in a statement. 

"The CLARITY Act replaces uncertainty with confidence for entrepreneurs, the broader market, and consumers," he added. "It shows that Congress can deliver thoughtful, durable policy solutions in a space too often clouded by confusion and conflict."

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GENUIS votes cast

Lawmakers voted 308 - 122 for the stablecoin bill. GENIUS, which has already been passed in the Senate, would require stablecoins to be fully backed by U.S. dollars or similarly liquid assets, mandate annual audits for issuers with a market capitalization of more than $50 billion, and establish guidelines for foreign issuance. That bill is likely to be at Trump's desk before the end of the week, where he is expected to sign it into law. 

Last, the anti-central bank digital currency bill was passed 219-210 on Thursday. The bill would block the Federal Reserve from issuing a central bank digital currency directly to individuals. A CBDC is a digital form of fiat money, directly issued and regulated by a country's central bank. Federal Reserve Chair Jerome Powell has also said the central bank won't issue a CBDC without congressional approval. 

Votes crumbled after several Republicans, including Reps. Marjorie Taylor Greene, Chip Roy, Michael Cloud, and Anna Paulina Luna, among others voted no initially on Tuesday during a procedural vote, according to reporting from The Hill. Greene said she was concerned about the GENIUS Act's treatment of CBDCs, which she said argued could be a backdoor into issuing a digital dollar.

However, lawmakers leading the effort have since made clear that the GENIUS Act does not allow the Federal Reserve to issue a CBDC. Lawmakers ultimately agreed to incorporate the CBDC ban into the National Defense Authorization Act, Emmer told The Block. On Wednesday, after again hitting a snag over CBDC concerns, lawmakers pushed through and passed the procedural vote. 

What's next

Clarity has not gone through the Senate, as Republican senators are trekking their path and have laid out principles for such a bill. Republican Senate Banking Committee leadership has also imposed a deadline of September 30 to get something done.

House Democrats' turnout could shape conversation in the Senate, Jennifer Schulp, director of financial regulation studies at the libertarian think tank Cato Institute, said earlier this week. The Senate will likely not use Clarity as a starting point, but will likely take some pieces from it, a person familiar with the discussions told The Block on Monday.

The Senate version is more likely to be based on work done already by Sens. Cynthia Lummis, R-Wyo., and Sen. Kirsten Gillibrand, D-N.Y., they said. 

As for the CBDC bill, that will be included in the National Defense Authorization Act, Emmer said. The annual NDAA is considered a "must-pass" bill. 

Ongoing concerns

Some in the DeFi industry also have some concerns about Clarity, specifically when it comes to federal preemption and registration limitations. 

A person familiar with the matter told The Block earlier this week that the DeFi industry is concerned about its status in regards to federal preemption. As written, Clarity would require centralized exchanges to register with federal agencies and states would have to follow federal law, but there is not the same federal preemption for decentralized exchanges, leaving them vulnerable to a patchwork of state laws and potential enforcement actions, the person said. 

A separate concern among many Democrats has been Trump's involvement with digital assets. Bloomberg estimates the sitting president has profited some $620 million from his family's crypto ventures, including the World Liberty Financial DeFi and stablecoin project and the TRUMP and MELANIA memecoin launches. The Trump family also has a 20% stake in the mining firm American Bitcoin, which is expected to go public.

During a press conference earlier on Wednesday, House Democrats urged lawmakers to vote no on Clarity. 

Top Democrat of the House Financial Services Committee Maxine Waters called the Clarity and GENIUS "two of the most dangerous pieces of legislation."

"Let's be clear, these bills are a gift-wrapped invitation for Trump to continue his full-scale crypto con," she said.

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