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It’s day two of “Crypto Week” in the US House.
The Rules Committee on Monday afternoon heard from fellow representatives on three crypto bills: the GENIUS Act, the CLARITY Act, and the Anti-CBDC Surveillance Act.
House members then failed to pass a procedural vote Tuesday that would have advanced further debate around the bills. Thirteen Republicans voted against the motion (alongside Democrats), bringing the final tally to 196-223.
With the exact next steps unclear, it remains worth knowing about each potential law and what proponents and critics have to say:
GENIUS Act
This is the stablecoin-focused bill that passed the Senate last month with bipartisan support. It’s poised to pass in the House, too, but not everyone is happy about it.
Most Democrats that oppose the bill argue it fails to stop President Trump and his family from profiting off of USD1, the stablecoin tied to World Liberty Financial.
When asked during Monday night’s Rules Committee hearing why he wouldn’t support an amendment that explicitly bars the president from issuing a stablecoin, Rep. French Hill said Trump is not the issuer of a stablecoin — but an owner of a company that issued one.
When pressed further, Hill said the Senate had already discussed this issue at length (and 68 Senators still voted to pass the bill).
Some Dems also think that while the bill might be a step in the right direction, it falls short. The legislation is too weak on anti-money-laundering and terrorism-financing protections, opponents insist.
US-based stablecoin issuers have largely gotten behind the legislation. Circle — fresh off its public market debut — has even applied to establish a national trust bank in order to align with the policy.
For foreign issuers like Tether, the GENIUS Act comes with more hoops to jump through. The bill mandates that stablecoins be backed by cash and cash equivalents and that issuers file regular audited financial statements, something Tether has yet to do (despite quarterly attestation reports).
CLARITY Act
The CLARITY bill does two main things: First, it establishes the concept of (and defines) “digital asset commodities.” Second, it divides regulatory authority between the SEC and the CFTC.
The CLARITY Act is a bit more controversial within the industry. It’s by far the longest bill of the three, so it gives interested parties more to fight over.
One of the main issues brought up by opponents of the bill relates to decentralization. Sufficiently decentralized blockchains — defined in the legislation as transparent chains with no person or individual in control — are considered commodities.
The Rules Committee on Monday allowed the bill to advance, but representatives will have some amendments to consider.
Anti-CBDC Surveillance Act
This one is straightforward. It seeks to amend the Federal Reserve Act to prohibit the central bank from issuing a retail central bank digital currency (CBDC).
Proponents like the privacy aspects of the bill, arguing that a CBDC could give the government too much access to sensitive information.
Those against it say ruling out ever establishing a CBDC could put the US behind other countries exploring the technology. Democrat Rep. Stephen Lynch said the bill is “an act of breathless stupidity.”
This is a developing story. Check Blockworks.co and the daily Forward Guidance newsletter for further updates.
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Source: https://blockworks.co/news/crypto-week-bills-debate