Historic; Landmark; Watershed moment; Turning point; All of these adjectives and many others have been used to describe this past week of crypto legislation in Washington - and they’re all fitting. After years of regulatory unclarity and regulation by enforcement regarding digital assets in the United States the GENIUS, Clarity, and Anti-CBDC Acts have passed a full floor vote in the House of Representatives.
Our team was on Capitol Hill throughout this past week - and the past year - and experienced the political drama and a “floor revolt” on Tuesday and Wednesday that, for a moment, seemed like it may collapse this critical legislative effort. Thankfully, with a lot of support from the White House and the hard work of so many dedicated policymakers, advocates and staffers - the ultimate vote was a massive success, with strong bi-partizan support that included close to half of House Democrats joining Republicans in supporting some of the bills.
Solidus is proud to have played a role, alongside the broader industry, the Crypto Market Integrity Coalition, and thousands of dedicated practitioners, in pushing for this important regulation. As we indicated in our “Trump’s First 100 Days on Crypto” blog post in May, since the beginning of the year we’ve met with dozens of lawmakers and their staff, shared research and data and even demoed our solution to showcase growing market surveillance standards and the industry’s immense commitment to consumer protection. In that blog post, we also emphasized the the first 100 days were mostly about talking, which needs to be delivered on.
With yesterday’s vote and today’s signing, the first phase of delivery is completed. In this blog post, we break down what’s next, as we continue the effort to achieve regulatory clarity for digital assets across the board.
The GENIUS Act - From being signed into law, into practical regulatory framework
The GENIUS Act establishes licensing frameworks and the relationship between the US banking systems and stablecoins. It compels the Federal Reserve to allow regulated, FDIC-insured banks, to issue and accept stablecoins, while designating the Office of the Comptroller of the Currency as the issuer of licenses for non-bank stablecoin issuers. Importantly, in both cases, it also applies Bank Secrecy Act compliance and regulation to these assets, offering citizens guardrails and protections from market abuse, money laundering, and manipulation.
The next step is turning the high-level legislation into practicable, clear regulatory requirements. The bill sets a specific timeframe - up to 120 days after issuing final regulations, or 18 months from the law’s enactment (meaning, today) - to establish licensing and oversight frameworks for stablecoin issuers. These frameworks are expected to more granularly cover prudential requirements such as capital and liquidity standards, redemption procedures, reserve transparency and asset composition, risk management practices, cybersecurity protocols, and regular examinations.
This makes the next 18 months critical to supporting the regulator’s effort and driving smart, effective regulatory requirements that balance stablecoins’ technological nuances, consumer protection and innovation. Our team will continue to work with all relevant agencies and with our clients and partners throughout this process. We’ll be focusing on educating and demonstrating the power of the blockchain’s transparency and advanced risk monitoring capabilities like cross on and off-chain ecosystem monitoring, to not only enable fighting financial crime more effectively than in traditional finance, but doing so in less burdensome, privacy-intruding means.
What’s Next for the CLARITY Act and Market Structure Updates?
While the CLARITY Act also passed in the House, unlike the GENIUS Act, it hasn’t yet been passed by the Senate - and in the U.S. political system, both are necessary for a law to be ready for signing. So, attention now turns to the Senate, where the next few months will see a complex process where both the Banking Committee (which oversees the SEC) and Agriculture Committee (which oversees the CFTC) need to develop the law, before reconciling it into one piece of legislation.
The CLARITY Act as it left the House clarifies how digital assets are classified and regulated, providing clear jurisdictional guidance for the SEC and CFTC. The key provisions of the Act cover the following:
- Digital assets that rely on blockchain value are defined as "digital commodities." These are primarily overseen by the CFTC, which must regulate digital commodity exchanges, brokers, dealers, and alternative trading systems, with requirements for trade monitoring, record‑keeping, and customer asset protections.
- Exemptions are created for digital commodities on mature or near‑mature decentralized blockchains from SEC registration—assuming they meet specific criteria like sales thresholds—while the SEC retains oversight of digital asset activities that resemble securities.
- The Act mandates registration, compliance, and disclosure regimes tailored to digital asset markets and delineates enhanced definitions and listing requirements to bolster market integrity and investor protection.
- It also imposes anti‑money laundering (AML) obligations on exchanges and brokers, subjecting them to the Bank Secrecy Act.
In essence, the CLARITY Act draws a bright line between commodities and securities in the crypto space, assigns clear regulatory authority (CFTC over decentralized, blockchain‑based assets; SEC over more centralized, securities‑like offerings), and imposes robust compliance, reporting, and AML standards to promote innovation while safeguarding investors.
While the language of the House-passed CLARITY Act is a strong foundation for the Senate to work with, especially because of the broad bi-partisan support it won, the industry expects changes as the Senate further develops the bill.
The Senate dual-committee process for Clarity
Both the Banking Committee and the Agriculture Committee are preparing parallel versions of the CLARITY Act, each focused on the agency under their jurisdiction—the SEC and CFTC, respectively. While working independently, both committees are expected to follow similar processes, inviting industry feedback and revisiting key provisions from the House-passed bill.
The Banking Committee’s draft is expected to make some revisions focused on clarifying the division of oversight between the agencies and the further clarifying SEC oversight, strengthening AML/KYC and market abuse provisions, and refining the definition of tokenized securities. As part of its process, the Committee will release a Request for Information (RFI) with numerous questions to gather input from stakeholders, though the response window is expected to be relatively short.
Similarly, the Agriculture Committee has indicated it will build on the “good bones” of the House bill, while issuing its own draft accompanied by a longer public comment period, providing the industry a more extended opportunity to weigh in. However, its timeline may be lengthened due to internal deliberations around complex issues such as memecoin and NFT classification, affiliate trading and vertical integration rules, and the scope of DeFi carve-outs.
The timeframes thrown around for finalization and passing of the bill go between as early as September, to the end of the year, and worst case scenario, going into early next year. As always when it comes to Washington, we should all brace for potential political landmines.
When asked what can the industry do to help, the answer was straight forward:
- Consensus is key - the industry should continue to find common ground where there are differences, focus on the fact that “politics is the art of the possible,” and generate a unified voice to lawmakers.
- Demonstrate commitment to consumer protection - with democrats playing a key role and the importance of a bipartisan bill, staffers asked the industry to advocate by emphasizing the industry’s commitment to market integrity and consumer protection, growing standards for surveillance risk monitoring.
- Respond as quickly as possible to RFI’s and consultation requests by both committees.
- Provide broad blockchain and digital asset education, especially to Agriculture Committee members, who may be less fluent in financial technology issue, and need to get up to speed to meaningfully debate the bill.
At Solidus, we’re prepared to continue playing an important role here, serving as a resource to policymakers and working alongside our industry partners.
Last but not least - the importance of the CBDC Anti-State Surveillnace Act
While this last critical piece of legislation has received less attention, this past week it’s proven as key to the political process. The Anti-CBDC Act is essentially aimed at not allowing the Federal government to issue its own stablecoin, as to prevent a situation where the government uses its own blockchain to monitor financial activity. The Act prohibits the Federal Reserve from issuing a central bank digital currency (CBDC) either directly or through intermediaries, and bars it from testing, developing, or using a CBDC for monetary policy—unless Congress explicitly authorizes such activity. It also prevents Federal Reserve banks from offering financial services or maintaining accounts for individuals, reinforcing the principle that digital currency should remain private and free from potential government surveillance. Supported by the House (219–210 vote) and backed by groups like the ABA, the bill is designed to uphold financial privacy, preserve the role of traditional banks, and ensure that any future CBDC requires clear congressional approval.
The Anti-CBDC Surveillance State Act was nearly a flashpoint that derailed broader this week’s votes. Fiercely backed by conservatives and members of the Freedom Caucus, the bill became a political priority for those concerned about government overreach and financial surveillance, leading to 12 Republicans voting against the passage of GENIUS and CLARITY in a procedural vote on Monday. Its inclusion was seen as non-negotiable by key Republican factions, creating tensions with lawmakers focused on advancing bipartisan regulatory frameworks like GENIUS and CLARITY. The impasse was ultimately via intervention and brokering by President Trump and the White House, and was resolved through a strategic compromise: attaching the Anti-CBDC language to the must-pass National Defense Authorization Act (NDAA), allowing progress to continue on the remaining digital asset bills while giving conservatives a critical policy win to take back to their base.
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