Crypto
What’s a stablecoin? House passes landmark bills to regulate the cryptocurrency
The Republican-controlled House on Thursday passed landmark legislation to regulate stablecoin in a big win for the cryptocurrency industry.
Bitcoin at all-time high as lawmakers focus on pro-crypto legislation
President Donald Trump, once a crypto skeptic, has become a major promoter of the industry.
Scripps News
WASHINGTON – The Republican-controlled House passed a trio of bills on July 17 that amount to a big win for a cryptocurrency industry that has helped make President Donald Trump tens of millions of dollars.
A piece of the landmark legislation package, dubbed the GENIUS Act, creates a regulatory framework for stablecoins, a type of cryptocurrency tied to the value of an asset like the U.S. dollar.
Advocates say the primary bill will help protect consumers and set industry standards that could allow stablecoins to become mainstream for digital payments and other financial instruments.
The main bill, approved by the Senate in June, passed the House by a vote of 308-122, with all Republicans and several Democrats voting in favor. It is now headed to Trump’s desk to be signed into law.
“This is a historic opportunity for the United States. After years of work, American innovators are one step closer to having the clarity they need to build here at home while ensuring the future of the digital economy reflects our values of privacy, individual sovereignty, and free-market competitiveness,” Republican Majority Whip Rep. Tom Emmer of Minnesota said in a statement.
However, House leadership had hit unexpected hurdles midweek while trying to advance the three crypto bills, with the first procedural votes on July 16 breaking a record for the chamber by lasting about nine hours.
One measure barring the Federal Reserve from creating a central bank for cryptocurrency was a particular sticking point, with Republicans debating how to best set the bill up to succeed in a future Senate vote. It passed the lower chamber on July 17 entirely with GOP support in a 219-210 vote that fell along party lines.
The Clarity Act, which defines when a cryptocurrency is a security or a commodity and clarifies the Securities and Exchange Commission’s jurisdiction over the entire financial sector, also passed the House on July 17 and must head to the Senate.
Senate Democrats have voiced concerns about Trump’s connections to the cryptocurrency industry.
“The GENIUS Act will accelerate Trump’s corruption by supercharging the size of the stablecoin market and the reach and profitability of USD1,” said Sen. Elizabeth Warren, D-Massachusetts, on the Senate floor in May.
One of the biggest money-making ventures for Trump was World Liberty Financial, a cryptocurrency platform launched last year. It brought in $57.3 million and it launched USD1, a U.S. dollar-backed stablecoin.
Trump also held a dinner in May for the top purchasers of the $TRUMP meme coin, owned by an affiliate of The Trump Organization.
However, supporters of the bill maintained that it could help safeguard investors and help Americans have greater access to the financial system.
“The golden age of digital assets is here, and the U.S. will lead,” said Wisconsin Rep. Bryan Steil in a statement.
Contributing: Riley Beggin, Medora Lee and Swapna Venugopal Ramaswamy, USA TODAY
Cryptocurrency laundering was an $82 billion problem last year, Bloomberg News reported Tuesday (Jan. 27), citing data from blockchain analysis firm Chainalysis.
Crypto
Strategy buys even more Bitcoin—$264 million of it—even as Bitcoin slumps to $87,000. | Fortune
Despite the current downturn for crypto, Strategy added even more Bitcoin to its collection. The company bought more than 2,900 Bitcoin last week, bringing its total to over 712,000, according to an X post by cofounder Michael Saylor. The move follows a more than $2 billion purchase earlier this month.
Strategy is the first and biggest digital asset treasury, or a type of company that acquires and holds on to large amounts of crypto. Saylor’s company began investing in Bitcoin in 2020 and now holds more than 3% of the total supply. This business model has confronted major challenges in the past few months, as the largest cryptocurrency has plummeted since its all-time high in October. Bitcoin is worth about $87,000, down about 31% since then, according to Binance.
One analyst views Saylor’s purchase as expected, considering the company’s business strategy, which is to continually amass Bitcoin on the theory it will appreciate in the long term, and to time purchases to coincide with market dips.
“It’s not surprising for me to see that they’re really aggressively continuing to purchase [Bitcoin]”, said Nathan Schmidt, an analyst at CFRA Research. “It is certainly the playbook for them these days.”
Bitcoin’s fall from its all-time high of about $126,000 in October was caused in part by a flash crash in the fall, where crypto traders lost more than $19 billion in their positions. Misfortunes for digital assets have only continued this calendar year. The sector dipped as tensions mounted between the U.S. and Europe over Greenland. In addition, major regulatory legislation, referred to as the Clarity Act, has stalled as major figures in the crypto industry spar over its details.
The major cryptocurrency isn’t the only one to suffer losses, as altcoins are down as well. Ethereum is down 30% in the last three months to its current price of $2,899, and Solana is down more than 38% to its price of about $124, according to Binance.
Crypto’s dip has led to disastrous returns for digital asset treasuries like Strategy. Saylor’s company stock is down about 64% since July to its current price of about $160.
Schmidt, the analyst from CFRA Research, argues that the biggest risk to Strategy is long-term declines in the value of Bitcoin. He says that the company could survive such a dip in the next few years because of its liquidity, but that over time the company would be in trouble.
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