US House Passes Groundbreaking Cryptocurrency Legislation

The U.S. House of Representatives has approved three significant bills aimed at establishing a comprehensive regulatory framework for cryptocurrencies, fulfilling a commitment made during the Trump administration.

Bipartisan Support for Key Legislation

Two of the newly passed bills, the GENIUS Act and the CLARITY Act, garnered substantial bipartisan backing, aided by lobbying efforts from some Democratic lawmakers.

Trump’s Influence on Cryptocurrency Policy

Since assuming office, President Trump has taken various steps to bolster the cryptocurrency industry, including appointing Paul Atkins, a known advocate for digital currencies, to lead the Securities and Exchange Commission (SEC). According to Forbes, Trump’s engagement in the crypto market has reportedly increased his wealth to $5.3 billion within a year.

Legislative Pathways for GENIUS and CLARITY Acts

The GENIUS Act is now poised for the President’s signature, while the CLARITY Act will move to the Senate for further consideration, where Republicans maintain a narrow majority.

Key Features of the GENIUS Act

1. The GENIUS Act received a vote tally of 308-122 after passing through the Senate in June and is awaiting the President’s endorsement. This legislation mandates that issuers of stablecoins, including banks and cryptocurrency firms, maintain reserves equivalent to the value of the coins in U.S. dollars or similar assets.

2. This Act aims to regulate the stablecoin market, which is valued at approximately $238 billion, as reported by CoinDesk. Once enacted, it will provide banks and other entities with a clearer guideline for issuing digital assets, requiring them to disclose the details of their reserves on a monthly basis.

Understanding the CLARITY Act

3. The CLARITY Act, which passed with a vote of 294-134, seeks to clarify the distinction between cryptocurrencies classified as securities and those considered commodities. This clarification is essential for defining the SEC’s authority over the cryptocurrency sector, a point of contention during the Biden administration.

4. Some Democratic representatives voiced strong opposition to the CLARITY Act, arguing that it could favor Trump’s crypto interests by allowing for less stringent regulations. This bill must clear the Senate before it can be sent to the President for final approval.

Implications for Cryptocurrency Classification

5. Advocates within the cryptocurrency industry argue that many tokens should be categorized as commodities rather than securities. This classification would simplify the process for platforms to offer these tokens to consumers, as they would not be subject to extensive securities regulations.

(With contributions from Reuters and AFP)

Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct their own research before making any investment decisions.