US House Breaks Impasse, Advances Crypto Legislation

Late Wednesday night, local time, Republican conservatives ended a two-day blockade of cryptocurrency bills, opening the way for the House to vote on a series of legislation supported by former President Donald Trump. After pressure from Trump on Tuesday, these hardliners ultimately relented. Trump has long been a supporter of digital assets, touting the upcoming votes as “crypto week.” The House voted 217-212 to advance the procedural steps needed to begin consideration of the cryptocurrency bills, which includes a stablecoin bill already passed by the Senate — which industry supporters hope will encourage wider use of dollar-denominated digital tokens.

Intense Negotiations Break the Logjam

This followed a closed-door standoff between House conservatives and the leadership of the Financial Services Committee and the Agriculture Committee that drafted the bills. To facilitate negotiations, the voting window remained open for more than 9 hours, breaking the record for the longest vote in House history. House Speaker Mike Johnson said leadership assured opponents that a bill banning the Federal Reserve from issuing a digital currency (CBDC) would be included in the Defense Authorization Act later this year, thus convincing them to move forward on the stablecoin bill. "This breaks the logjam and allows us to get things done," Johnson said. "Sometimes the process takes longer than expected, but it's all part of the procedures."

Trump's Last-Minute Intervention

According to two anonymous attendees describing the private discussions, Trump intervened at the last minute and listened to a briefing on the agreement. "He is happy with the result," one said. Johnson said a vote is expected Thursday on the Senate-passed stablecoin bill, known as the “GENIUS Act.” That stablecoin bill passed the Senate last month with broad bipartisan support, and if passed in the House, would go to Trump for signing. The bill sets regulatory rules for dollar-backed stablecoins, including requiring companies to hold reserves equal to the dollar. This would be the first major cryptocurrency bill passed by Congress, marking a major lobbying victory for cryptocurrency companies.

Clarity Act Vote Delayed

A vote on the “Clarity Act” is likely to be delayed until next week. That bill would clarify whether assets are regulated by the Securities and Exchange Commission (SEC) as securities or by the Commodity Futures Trading Commission (CFTC) as commodities. This procedural vote will also allow the House to quickly move forward with the revised spending cut plan requested by Trump. While House Republicans were arguing over the cryptocurrency issue on Wednesday, senators were rushing to vote, hoping to pass the cut plan before Friday's deadline.

Analysis and Potential Impacts

This development represents a pivotal moment in cryptocurrency regulation in the United States. The potential passage of the stablecoin bill could provide long-awaited regulatory clarity for digital currency companies and facilitate wider adoption of stablecoins. On the other hand, the delay in the vote on the Clarity Act leaves the industry in uncertainty regarding how different digital assets are regulated.