What exactly happened in the U.S. around crypto, stablecoins, and the digital dollar after the rejection of key bills in Congress?
Specifically, 13 Republicans voted alongside Democrats and blocked the progress of the bills, causing Bitcoin’s price to drop.
https://x.com/coinbase/status/1944772256221024622
THE TWO MAJOR BILLS
You might ask, "Okay, what were those bills?" Here’s where things get interesting. Two major bills were on the table:
The GENIUS Act, which deals with stablecoins. It has already passed the Senate and is very close to becoming the first standalone crypto bill in U.S. history. It establishes rules for the operation of stablecoins, enhancing transparency and security in the digital payments space.
The CLARITY Act, which addresses the bigger picture. It regulates when a digital asset is considered a "security" (and therefore falls under the SEC’s authority) and when it’s considered a "commodity" (falling under the CFTC’s authority). This distinction is crucial because it defines which companies can handle which products and which regulatory framework applies.
The GENIUS Act appears to have bipartisan support. But the CLARITY Act has been caught in a political storm, mainly due to Donald Trump’s "family investment activities." With meme coins like $TRUMP and $MELANIA, and a DeFi company called World Liberty Financial, some senators worry that the bill simply "whitewashes" Trump’s political narrative and sets up a regulatory framework that benefits him.
In an effort to push the CLARITY Act forward, companies like Coinbase and Ripple launched lobbying campaigns—even using chocolates in Capitol Hill. Yes, you heard that right. Thousands of chocolates were handed out to senators and aides, wrapped in packaging that read: "1 in 5 Americans owns crypto." Lobbying in the age of Web3.
THE ANTI-CBDC SURVEILLANCE STATE ACT
While all this was playing out in the political arena, a third, equally critical bill appeared: the Anti-CBDC Surveillance State Act.
If passed, this bill would prohibit the Federal Reserve from issuing or testing a digital dollar (CBDC) that could be used for:
(a) surveillance of citizens' transactions, and
(b) controlling economic behavior through usage restrictions or conditions.
In simple terms, it aims to stop the Fed from creating something that resembles the Chinese model of digital surveillance. Supporters of the bill argue that financial freedom is non-negotiable, and the government has no business monitoring what people buy.
On the other hand, some voices emphasize that the bill would limit the Fed’s ability to modernize the payment system, which is crucial in a global environment moving at lightning speed.
The Bigger Picture: Private vs. State-Issued Digital Currency
Perhaps the most interesting aspect is the battle between private and state-issued digital money. On one side, you have stablecoins like USDC, which already function as a kind of digital dollar—but are privately issued. On the other side, a CBDC could offer government-backed trust and efficiency.
Who will prevail?
This is a debate that will likely dominate the conversation in the coming years.