Last week, the crypto industry celebrated its latest victory: The Senate
passed the Genius Act, which would regulate the red-hot stablecoin sector. From the sheer volume of
breathless adulation, and the near-equal amount of
fearmongering, you might expect that the bill will sail through the House of Representatives and land on President Trump’s desk by the end of summer. The reality, however, is much thornier.
Just to take a step back, let’s consider the sheer improbability that crypto has become one of the top legislative priorities for Congress. This isn’t health care reform or a major infrastructure vehicle. You could argue that the attempt to create regulation for the crypto sector is in the spirit of Dodd-Frank, but that landmark bill only passed in the wake of the largest financial crisis since the Great Depression and reshaped the foundation of our banking system.
The push for crypto bills did not spring into existence because of a financial crisis. In fact, the opposite happened, with legislative efforts stalling after the collapse of Sam Bankman-Fried’s crypto exchange FTX in late 2022. But the industry
spent north of $100 million in political donations, Trump
embraced the sector, and a bipartisan group of legislators took up the mantle this Congress.
Even if you wouldn’t touch crypto with a ten-foot pole, the near passage of a stablecoin bill has pushed the sector dangerously close to the mainstream. Remember, stablecoins are a kind of cryptocurrency typically pegged to the U.S. dollar. While in the past, crypto traders mainly used stablecoins for on-chain trading, companies are increasingly employing them for cross-border payments and payroll, and non-blockchain firms are getting more comfortable adopting them as the regulatory outlook thaws.
Stripe has made two major acquisitions in the past year, big tech firms like
Meta and
Apple are exploring integration, and the stablecoin company Circle had one of the
most successful IPOs in history. It’s probably time to start paying attention.
But that’s all assuming that the bill passes. The political calculus is not as simple as it seems, even with the overwhelming support in the Senate, which seemed like the biggest barrier thanks to the influence of
crypto skeptic Elizabeth Warren. The issue is that the crypto industry doesn’t just want the stablecoin bill. Influential groups, including Coinbase and Andreessen Horowitz, want a second bill that would create rules around market structure, or put more simply, how cryptocurrencies can be issued, traded, and supervised by existing agencies like the Securities and Exchange Commission and the Commodity Futures Trading Commission. It’s a much more ambitious—and existentially important—bill for the industry.
Rather than advancing a clean version of the Senate’s stablecoin bill, House Financial Services chair
French Hill (R-Ark.) has
plainly stated that he wants to pass both, likely by bundling them together into a crypto mega-bill. That’s even against the objections of Trump, who
posted on Truth Social last week that he wants the Senate’s stablecoin bill on his desk with “no delays, no add ons [sic].”
Beltway insiders I’ve spoken with have said the likeliest outcome, at least at this point, is that the House bundles together the stablecoin bill with the market structure bill, which will inevitably slow the cogs in the Senate. The upshot is that Congress has a slim chance of passing anything by August, which was a deadline that Trump previously demanded. And if the two bills end up combined, rather than the House rubber-stamping its own version of the Senate’s Genius Act, the crypto industry’s $100 million shot at enacting legislation could be seriously hamstrung. As one lobbyist told me, “It’s the calculus everyone is wondering [about].”
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