Crypto bills set to advance this week take industry closer to mainstream
The House of Representatives is set to pass a series of crypto-related bills in a week which the Republican majority has dubbed "crypto week." The most notable is a bill that would establish a regulatory framework for stablecoins and is likely to advance to President Donald Trump's desk.
That bill -- and another the House is considering that would define when a crypto token is a commodity -- is a huge win for the crypto industry, which has been pushing for federal legislation for years and poured money into last year's elections in order to promote pro-crypto candidates.
"Historically, when lawmakers advance industry-backed frameworks, institutional sentiment strengthens. We expect capital that was previously sidelined due to regulatory uncertainty to re-enter," said Jag Kooner, head of derivatives at crypto exchange Bitfinex.
"Crypto week" also comes as bitcoin has scaled record highs in recent days as investors dive back into risk assets on the back of tariff-related news, as well as expectations that legislation could potentially unlock capital in the crypto space.
The big ticket item the House is set to vote on this week is a bill that would create a set of federal requirements for stablecoins.
Stablecoins, a type of cryptocurrency designed to maintain a constant value, usually a 1:1 dollar peg, are commonly used by crypto traders to move funds between tokens. Their use has grown rapidly in recent years, and proponents say they could be used to send payments instantly.
The bill, dubbed the GENIUS Act, received bipartisan support in the Senate, with several Democrats joining most Republicans to back the proposed federal rules. It is expected to pass the House and would then head to Trump, who has said he will sign it into law.
The bill would require tokens to be backed by liquid assets - such as U.S. dollars and short-term Treasury bills - and for issuers to disclose publicly the composition of their reserves on a monthly basis.
Crypto proponents say those rules could legitimize stablecoins, making banks, retailers and consumers more comfortable with using them to transfer funds.
Ahead of the bill's final passage, many companies across sectors are already considering how they might incorporate stablecoins into their business, said Julia Demidova, head of digital currencies product and strategy at FIS, a financial technology solutions provider.
"I think everyone is realizing, look, this is moving forward and they need to have a stablecoin strategy," she said. "They need to think how banks themselves will position against some of these novel, new, emerging fintech-issued stablecoins as well."
Still, many Democrats have argued that the GENIUS Act would not prevent big tech companies from issuing their own private stablecoins, and have called for stronger anti-money laundering protections and prohibitions on foreign stablecoin issuers.
Many Democrats fiercely oppose both the GENIUS Act and the CLARITY Act, arguing that they have too few consumer protections and would be a giveaway to Trump's own personal crypto ventures by enabling softer-touch regulation.
Democratic members are expected to offer several amendments to both the GENIUS Act and the CLARITY Act on the House floor next week, according to a source familiar with the matter, but it is unclear whether any of them will be considered.
The House will also vote next week on a bill that would prohibit the U.S. from issuing a central bank digital currency, which Republicans say violate Americans' privacy. The bill has not been considered in the Senate and the Federal Reserve has not indicated a desire to develop a central bank digital currency.
MARKET STRUCTURE
The House this week is also expected to pass a bill that aims to develop a regulatory regime for cryptocurrencies and would expand the Commodity Futures Trading Commission's oversight of the digital asset industry and is backed by the industry.
If signed into law, the bill would define when a cryptocurrency is a security or a commodity and clarify the Securities and Exchange Commission's jurisdiction over the sector, something crypto companies heavily disputed during the Biden administration. That could help crypto companies avoid the oversight of the SEC, which under the Biden administration sued a number of crypto exchanges for flouting its rules.
Crypto companies have argued that most crypto tokens should be classified as commodities, rather than securities, which would enable platforms to more easily offer those tokens to their customers.
That bill, called the CLARITY Act, has yet to be considered in the Senate, where it would need to pass before heading to Trump for final approval.
Trump has sought to overhaul U.S. cryptocurrency policies after courting cash from the industry during his presidential campaign. The sector spent more than $119 million backing pro-crypto congressional candidates in last year's elections.
Trump's crypto ventures include a meme coin called $TRUMP, launched in January, and a business called World Liberty Financial, a crypto company owned partly by the president.
The White House has said there are no conflicts of interest and that Trump's assets are in a trust managed by his children.
(Reporting by Hannah Lang in New York; Editing by Megan Davies and Daniel Wallis)
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