Congressional Crypto Bills Face Renewed Stalls

Crypto Regulation Bills Stall in House Amidst Republican Divisions

Washington D.C. – A trio of cryptocurrency regulation bills faced a significant setback in the House of representatives on Wednesday, as opposition from within the Republican party brought the legislation too a standstill for a second consecutive day. The gridlock highlights deep divisions within the Republican conference regarding digital asset policy and raises questions about the extent of former president Donald Trump’s influence over his party.The legislative effort to advance the crypto bills, which aim to establish a regulatory framework for the burgeoning industry, hit a snag due to fresh opposition from a new bloc of Republicans. This opposition stemmed from last-minute changes made to appease earlier conservative hold-outs,demonstrating a fractured approach to crypto regulation within the party.

As of Wednesday afternoon, over half a dozen Republicans had joined Democrats in voting against allowing two of the key bills to proceed in their current forms. House Speaker Mike Johnson (R-La.) can only afford to lose a small number of Republican votes to pass the measures, making the current stalemate a substantial hurdle.The stalled progress has fueled concerns about the House Republican conference’s ability to coalesce around a unified stance on crypto regulation. While the bills are generally seen as enjoying broad bipartisan support, internal party disagreements are proving to be a significant impediment.

The latest stumbles also cast doubt on the effectiveness of former President Donald Trump’s efforts to rally support. Trump had personally intervened on tuesday evening, meeting with a dozen conservative Republicans in the Oval Office.Following the meeting, he announced on Truth Social that they had “all agreed to vote” in favor of the procedural rule necessary to debate the legislation. Despite this intervention, new opposition emerged the following day.

For the crypto industry, the ongoing legislative paralysis is a significant disappointment, threatening to derail hopes of passing any crypto-related legislation during what had been optimistically dubbed “Crypto Week.” The new opposition on Wednesday was particularly notable as it came from members of key congressional committees who had authored the legislation, not solely from the more hardline conservative faction.

Sources indicate that lawmakers on the Committee on Financial Services, for instance, objected to last-minute modifications aimed at merging two of the bills, according to POLITICO. The three bills under discussion include the GENIUS Act, which recently passed the Senate, and two House-originated bills: the CLARITY Act and a measure to prohibit the Federal Reserve from establishing a central bank digital currency (CBDC).

In a potential sign of the ongoing negotiations and the challenge of navigating these internal divisions, Republican leadership is reportedly considering an option strategy. One option being explored is attaching the proposed ban on a central bank digital currency to an unrelated, “must-pass” bill, according to reports from Punchbowl News.

The situation remains fluid, with ongoing discussions and potential shifts in strategy as lawmakers grapple with the complexities of regulating the cryptocurrency landscape. This developing story will continue to be monitored for further updates.

What specific concerns does the SEC have regarding the FIT 21 bill?

The current Landscape of Crypto Regulation in Congress

As of July 16, 2025, several key pieces of legislation aimed at regulating the cryptocurrency market in the United States are experiencing significant roadblocks in Congress. This stagnation follows a period of cautious optimism earlier in the year, fueled by bipartisan interest in establishing a clearer regulatory framework for digital assets. The delays impact everything from blockchain technology adoption to the future of Bitcoin and Ethereum.

Key Bills and Their Status

Several bills are currently stalled, each addressing different facets of the crypto ecosystem:

The Financial Innovation and Technology for the 21st Century Act (FIT 21): This bill, spearheaded by Representatives Patrick McHenry and ritchie Torres, aims to define which digital assets are securities and which are commodities, largely deferring to the CFTC for commodity oversight. It’s facing resistance from the SEC, who argue it unduly limits their authority.

Lummis-Gillibrand responsible Financial Innovation Act: Introduced in the Senate, this comprehensive bill covers a broad range of crypto issues, including stablecoins, taxation, and consumer protection. It’s stalled due to disagreements over the scope of regulatory authority and concerns about potential loopholes.

Stablecoin Legislation: Separate bills focused specifically on regulating stablecoins – cryptocurrencies pegged to a stable asset like the US dollar – have also hit snags. Concerns center around ensuring adequate reserves and preventing systemic risk. The collapse of TerraUSD (UST) in 2022 continues to heavily influence these discussions.

Reasons for the Renewed Stalls

Multiple factors contribute to the current impasse:

SEC-CFTC Turf War: A fundamental disagreement between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over which agency should have primary oversight of the crypto market remains a major sticking point. The SEC, under Chair Gary Gensler, has taken a stricter enforcement-focused approach, classifying many tokens as securities.

Political Polarization: While there’s bipartisan agreement on the need for regulation, disagreements on how to regulate are deepening along party lines. Concerns about national security, illicit finance, and investor protection are all playing a role.

Lobbying Efforts: Intense lobbying from various stakeholders – including crypto exchanges, industry associations, and consumer advocacy groups – is further complicating the process. Each group is pushing for regulations that favor their interests.

upcoming Elections: With the 2024 elections behind us and the 2026 midterms looming, lawmakers are increasingly hesitant to take controversial votes on complex issues like crypto regulation.

Impact on the Crypto Industry

The continued uncertainty is having a tangible impact on the crypto market:

Reduced Investment: Institutional investors are holding back on significant investments until a clearer regulatory framework is in place.

Innovation Slowdown: The lack of clarity is stifling innovation in the Web3 space, as companies are unsure how to navigate the legal landscape.

Regulatory Arbitrage: Crypto firms are increasingly looking to operate in jurisdictions with more favorable regulations,possibly leading to a loss of economic activity in the US.

Market Volatility: The uncertainty contributes to increased volatility in cryptocurrency prices.

The SEC’s Enforcement Actions & Ripple Case

The SEC’s aggressive enforcement actions against crypto companies, including lawsuits against Ripple Labs, Coinbase, and Binance, have added to the tension.The Ripple case, specifically, has been closely watched. While ripple achieved a partial victory in July 2023, clarifying that XRP is not inherently a security, the SEC continues to pursue its case, alleging that Ripple’s sales of XRP were securities offerings. This ongoing legal battle underscores the SEC’s determination to assert its authority over the crypto market. The outcome of this case will likely set a precedent for future enforcement actions.

What’s Next? Potential Paths Forward

Despite the current challenges, several potential paths forward exist:

1. Compromise Legislation: A scaled-back bill that addresses the most pressing issues – such as stablecoin regulation – could garner enough bipartisan support to pass.
2. Agency Collaboration: Increased cooperation between the SEC and CFTC could help to resolve jurisdictional disputes and create a more unified regulatory approach.
3. Continued Litigation: The SEC may continue to pursue enforcement actions, potentially forcing Congress to act to clarify the legal landscape.
4. Executive Action: While limited, the Biden management could potentially take executive action to address certain aspects of crypto regulation.

Benefits of Clear Crypto regulation

Establishing a clear and comprehensive regulatory framework for crypto offers several potential benefits:

Investor Protection: Regulations can help to protect investors from fraud and manipulation.

Financial Stability: Clear rules can mitigate systemic risk and promote financial stability.

Innovation: A well-defined regulatory surroundings can foster innovation and attract investment.

Illicit Finance Prevention: Regulations can help to prevent the use of crypto for illicit activities, such as money laundering and terrorist financing.

practical Tips for Crypto investors

Given the current regulatory uncertainty, here are some practical tips for crypto investors:

Diversify Your Portfolio: Don’t put all your eggs in one basket. Diversify your investments across different cryptocurrencies and asset classes.

Do Your Research: Thoroughly research any cryptocurrency before investing. Understand the risks involved.