Despite the buzz surrounding what former President Donald Trump has termed “Crypto Week,” experts advise against early celebrations in the digital currency sector.
The House of Representatives has recently approved three major bills targeting the regulation of digital assets, signaling a significant milestone for the industry. However, these legislative measures are not expected to be enacted anytime soon.
Three Influential Crypto Bills Approved
The three bills—the Genius Act, the Digital Asset Market Clarity Act, and the Anti-CBDC Surveillance State Act—are considered vital for creating a regulatory framework for cryptocurrencies.
This progress has been driven by vigorous lobbying from industry leaders such as Coinbase Global, which have effectively swayed politicians, including Trump.
In anticipation of this legislative focus, Bitcoin prices soared to unprecedented levels, exceeding $123,000 for the first time, with other cryptocurrencies like Ethereum (ETH) and XRP also experiencing notable gains. Nevertheless, TD Securities analyst Jaret Seiberg anticipates that it may take over a year for the new laws to be implemented.
Of the bills passed, only the Genius Act has also been approved by the Senate, with Trump signing it into law shortly thereafter. This legislation outlines a framework for regulating payment stablecoins, requiring issuers to hold one-to-one reserves in US dollars or Treasury securities.
Treasury Secretary Scott Bessent has suggested that this law could result in a $3.7 trillion increase in demand for T-bills, though some experts, such as Raymond James’ Ed Mills, remain skeptical of these estimates.
Uncertainty Surrounds Implementation Timeline
Despite the Genius Act being signed into law, there will be no immediate impact on stablecoin issuers like Circle Internet Group or Tether.
According to a report by ABC News, the Treasury Department is expected to develop regulations within a year outlining the criteria for issuing stablecoins and the conditions under which foreign-pegged stablecoins can enter the US market. This process will include public feedback and could lead to legal challenges, indicating a lengthy timeline before tangible changes occur in the industry.
The Digital Asset Market Clarity Act is particularly significant as it outlines the regulatory responsibilities of crypto exchanges, brokers, and tokens between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
With bipartisan backing in the House, there is hope that the Senate will pass its version before the August recess, potentially enabling a comprehensive law for the president’s signature by September.
The Anti-CBDC Surveillance State Act, the third legislative piece, seeks to prevent the Federal Reserve from issuing a central bank digital currency (CBDC). This bill passed with narrower support and was attached to a national defense bill; its future in the Senate is likely to involve prolonged negotiations, possibly extending into December.
Featured image from DALL-E, chart from TradingView.com
