Congress divided as GOP-backed crypto bills face backlash

Washington’s “crypto week” erupted into a fierce partisan battle in Congress. Republicans introduced a trio of bills to reshape digital asset policy, only to face sharp pushback from Democrats accusing them of favoring corporate interests over everyday Americans.

The proposed legislation, comprising the GENIUS Act, the CLARITY Act, and the Anti-CBDC Surveillance State Act, was introduced in the House of Representatives to address data privacy compliance and future digital currency systems. GOP lawmakers argue the bills are crucial to maintaining the US’s competitive edge in financial innovation.

However, during a heated Rules Committee hearing on Monday, Democratic Rep. Jim McGovern denounced the initiative as a “crypto giveaway,” slamming it as a misguided effort that ignores the risks of crypto-related corruption.

“I have not had one person in my district come up to me and say, ‘please, please Jim, make it easier for crypto millionaires to get richer, please make it easier to con people,’” said McGovern. “Yet that is exactly what is going on here.”

The remarks were a direct jab at President Donald Trump’s increased activity in the crypto space, including his family-linked company World Liberty Financial and its associated stablecoin USD1 (and his meme coin, Official Trump).

GOP defends innovation push

In a rebuttal, Republicans said the bill is meant to future-proof the economy and maintain US competitiveness in a fast-evolving cryptospace. The GOP’s tactics were also a central focus when committee chairman Rep. Virginia Foxx gaveled in the session.

Foxx described the GENIUS Act as historic legislation, stating that it would help drive responsible innovation in the United States. She added that Republicans look forward to working with businesses nationwide to fulfill the Act’s promise.

The GENIUS Act aims to oversee stablecoins by establishing comprehensive federal standards for issuers. The CLARITY Act addresses deficiencies in digital asset market structure, and the Anti-CBDC Surveillance State Act seeks to prohibit a US Central Bank Digital Currency that the government would use, many Republicans fear to surveil private financial activity.

Republicans argue that over-regulation should not stymie innovation and financial freedom. They say the bills will advance transparency, offer legal surety, and guard against harm to consumers while also helping to spur growth in the digital economy.

Critics, however, argue that the legislation doesn’t do enough to tackle fraud and abuse. McGovern said the bills opened doors to hucksters and market manipulation and were tilted toward rich insiders rather than average investors.

Lawmakers struggle to build bipartisan support

Republicans face an uphill task despite their enthusiasm. With a narrow majority in the House and no Senate control, the GOP may rely on Democrats to progress the legislation in both chambers.

Democrats are not budging easily. Those conflicts of interest, tied to Trump and spread across government, alarmed Representative Maxine Waters and Senator Adam Schiff. Schiff cautioned of “dangerous entanglements” between crypto firms and elected officials.

Waters noted that many components of the bill aligned with the goals of Trump’s crypto-backed ventures. She emphasized that the American people deserved policies that protected their money, not schemes designed to enrich political allies.

Some Democrats also said the legislation diverted the House from urgent matters, like preventing national security threats and addressing economic inequality. And even as crypto comes under greater scrutiny for fraud and instability, most recently in the unraveling of FTX and ongoing enforcement actions by the SEC, some lawmakers are raising questions about whether it’s time to ease up on oversight.

The discussion on Monday turned temporarily to the Department of Defense Appropriations Act, dramatizing the extent to which the legislative calendar has become infused with tension and pressure. However, Republicans say they are committed to revisiting the crypto package before the August recess, which means they have just under two weeks to do so.

Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now