In June, the United States Senate passed the GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins) Act, a legislative proposal aimed at mitigating the financial volatility associated with cryptocurrencies such as Bitcoin and Ethereum.
The bill, sponsored by Sen. Bill Hagerty (R-TN), is a solution proposed by President Trump to regulate the use of stablecoins, also known as "digital dollars." These digital currencies are designed to reduce risk by tying their value to a less volatile financial asset, typically the U.S. dollar.
According to RedState, proponents of stablecoins argue that these digital currencies, while less volatile than their counterparts, can facilitate faster and more cost-effective financial transactions. Prior to the Senate's vote on the Genius Act, Sen. Bill Hagerty, the bill's sponsor, stated that stablecoins could enable businesses and consumers to settle payments "nearly instantaneously," a process that could otherwise take weeks.
However, stablecoins are not without their risks. One of the most significant is the potential for the digital currency to become "depegged" from its underlying asset if the value or liquidity of that asset changes. This could lead to trading losses or systemic market risks related to insolvency and liquidity, as per S&P Global Ratings.
The Genius Act, which garnered broad bipartisan support in the Senate, seeks to establish regulatory guidelines for the stablecoin market, currently valued at $250 billion. The bill is part of a larger effort by Republican lawmakers and President Trump to support the cryptocurrency industry and relax regulations surrounding this emerging sector.
In a move to further this agenda, House Republicans announced the commencement of "Crypto Week," during which they planned to advance three cryptocurrency-themed bills. These included the Genius Act, the Clarity Act (which would regulate digital commodities beyond stablecoins), and the Anti-CBDC Surveillance State Act (which would prohibit the Federal Reserve from issuing any retail central bank digital currency directly to Americans).
However, "Crypto Week" did not start as planned. The House of Representatives voted 196-123 against advancing the Genius Act. Among the Republicans who voted "NO" were Ann Paulina Luna (FL), Scott Perry (PA), Chip Roy (TX), Victoria Spartz (IN), Michael Cloud (TX), Andrew Clyde (GA), Eli Crane (AZ), Andy Harris (MD), Marjorie Taylor Greene (GA), Tim Burchett (TN), Keith Self (TX), and Andy Biggs (AZ).
The procedural vote failed due to two main reasons. Firstly, Democrats decided to attach an amendment for the release of the Epstein Files to the GENIUS Act vote. Secondly, several Republican Representatives believed the bill contained covert provisions to establish the infrastructure for a central bank digital currency (CBDC).
Georgia Rep. Marjorie Taylor Greene was one of the most vocal critics, stating, "I just voted NO on the Rule for the GENIUS Act because it does not include a ban on Central Bank Digital Currency and because Speaker Johnson did not allow us to submit amendments to the GENIUS Act. Americans do not want a government-controlled Central Bank Digital Currency."
Arizona Rep. Andy Biggs echoed these sentiments, stating, "The Senate's GENIUS Act creates a framework for a layered Central Bank Digital Currency (CBDC) and does not guarantee self-custody (the freedom to control your own money). House Leadership must allow an open amendment process so Members can freely debate and improve the bill."
Despite this initial setback, 11 of the Republican holdouts met with President Trump, leading to speculation that their concerns about the CBDC may have been addressed or that promises to include provisions and amendments to the bill may have been made. This meeting appears to have smoothed over enough of the disagreements for the House to reconsider the procedural vote to advance the bill.
President Trump posted on Truth Social, "I am in the Oval Office with 11 of the 12 Congressmen/women necessary to pass the GENIUS Act and, after a short discussion, they have all agreed to vote tomorrow morning in favor of the Rule. Speaker of the House Mike Johnson was at the meeting via telephone, and looks forward to taking the Vote as early as possible. I want to thank the Congressmen/women for their quick and positive response. MAKE AMERICA GREAT AGAIN!"
Despite the rocky start to "Crypto Week," there is still potential for a successful conclusion. However, it is worth noting that Luna later clarified that her objection was not to releasing the Epstein files, but rather to a procedural vote on the "previous question," which would have allowed the Democrats to effectively control the floor, a clear example of procedural gamesmanship.
Login