Uncertainty Surrounds Cryptocurrency Legislation in Congress

Legislative Hurdles for Crypto Bills

On July 15, the prospects for much-anticipated cryptocurrency legislation in the US Congress faced significant challenges as a procedural vote aimed at advancing the proposals was rejected by lawmakers from both major parties. This setback is a significant disappointment for the cryptocurrency sector, which had been optimistic about securing legislative victories that would enhance the clarity and legitimacy of the digital asset market.

Political Dynamics and Reactions

Former President Donald Trump had previously promoted the week as “Crypto Week” on his Truth Social platform, encouraging House Republicans to support the proposed measures. However, a coalition of conservative Republicans and Democrats united to block the procedural vote, citing disagreements over how the legislation should be organized and addressed.

Following the vote, House Speaker Mike Johnson expressed his intention to continue discussions with members of Congress and indicated hopes for a renewed vote in the near future.

Market Impact and Reactions

In the wake of the legislative setback, bitcoin experienced a sharp decline, plummeting to $115,222 on July 16, marking a 4% drop within minutes. As of the latest reports, bitcoin‘s value had slightly recovered to $116,516, down 2.8% from previous levels, after reaching a high of $120,481.86 earlier in the day.

The news also affected shares of cryptocurrency-related companies, with Circle Internet and Coinbase Global experiencing declines, although they later reduced their losses. Circle Internet saw a drop of over 4%, while Coinbase’s shares fell by 1.5%.

Key Legislative Proposals

The House was in the process of evaluating several crypto-related bills, with a primary focus on a proposal aimed at establishing a regulatory framework for stablecoins. These digital currencies are designed to maintain a stable value, typically pegged to the US dollar, and have become increasingly popular among crypto traders for transferring funds between different tokens. Advocates argue that stablecoins could facilitate instant payments.

The proposed legislation, along with another bill that seeks to clarify when a cryptocurrency should be classified as a commodity, represents a significant opportunity for the crypto industry.

Additionally, the House was set to review a bill that would prevent the US from launching a central bank digital currency. Proponents of this measure argue that such a currency could grant the government excessive control over individuals’ financial activities. This particular bill has not yet been addressed in the Senate, and the Federal Reserve has not shown any inclination to pursue a central bank digital currency.

Tags

• Cryptocurrencies
• Law and Legislation
• United States
• Donald Trump

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.