Crypto Week In Jeopardy: Legislative Hurdles Threaten Progress On Regulation Bills

The future of three critical crypto bills faced uncertainty late Wednesday as conservative House Republicans united to oppose the legislation, bringing the process to a standstill. 

According to CNBC information, fresh opposition emerged from a new faction of Republicans who resisted “last-minute changes” aimed at appeasing earlier holdouts, complicating negotiations that are ongoing.

House GOP Divisions

As of late Wednesday, more than half a dozen Republicans reportedly joined Democrats in voting against allowing two of the regulation bills to advance in their current forms. 

This impasse has raised concerns about the ability of House Republicans to reconcile their differing views on crypto regulation, even though the bills generally enjoy broad support. 

House Speaker Mike Johnson from Louisiana can afford to lose only a few Republican votes to pass the measures through a party-line vote, making the current stalemate particularly precarious.

The situation also casts doubt on President Donald Trump’s influence within the party. After a meeting in the Oval Office on Tuesday evening with a group of conservative Republicans, Trump announced that they had reached an agreement to support the rules necessary for moving forward. 

However, Wednesday’s developments signify a setback for the crypto industry, which had hoped for legislative progress during what had been dubbed “Crypto Week.”

Alternative Strategies For Crypto Legislation

Opposition on Wednesday came not only from conservative hardliners but also from members of key committees involved in drafting the legislation. Among the bills at stake is the GENIUS Act, which successfully passed the Senate in June, alongside the CLARITY Act and another bill restricting the Federal Reserve from establishing a central bank digital currency (CBDC).

As negotiations continue, Republican leadership is reportedly contemplating alternative strategies, including adding the central bank digital currency ban to an unrelated must-pass bill, a move reported by Punchbowl. 

Market journalist Eleanor Terret noted on social media that Senate Republicans are hoping for some progress from the House to maintain momentum for crypto legislation, although they want to avoid another failed vote.

Some of the Republicans who initially opposed the bills but later shifted their stance after meeting with Trump did so on the condition that strong anti-central bank digital currency provisions would be integrated into the CLARITY Act, as the GENIUS Act is not open for amendments. 

However, the authors of CLARITY, along with several other committee members, have expressed concerns that combining these two initiatives could jeopardize the bipartisan market structure legislation they have worked on for months.

One Republican holdout, Representative Chip Roy, expressed skepticism about the agreements made previously, suggesting that the consensus reached in the White House meeting may no longer hold.

In light of the evolving situation, GOP leaders are now pushing to incorporate anti-CBDC language into the National Defense Authorization Act (NDAA) as another potential pathway for advancing the legislation. 

Featured image from DALL-E, chart from TradingView.com