Major cryptocurrency regulatory bills endorsed by former U.S. President Donald Trump suffered a procedural defeat in the House of Representatives on Tuesday, dealing a significant blow to the digital asset industry. Lawmakers rejected the rule vote—a critical gateway to floor debate—by 223 votes against 196, with 13 Republicans breaking ranks to join Democrats. This rare rebuke of Trump’s agenda stalled legislation widely expected to pass. House leaders may attempt another vote as early as Tuesday night, though potential amendments to win conservative support remain unclear.
Crypto-related stocks immediately retreated following the setback. Stablecoin issuer Circle (CRCL.US) plunged over 7% intraday before closing 4.58% lower. Coinbase (COIN.US) slid 1.52%, while Marathon Digital Holdings (MARA.US) dropped 2.34%. Despite the selloff, Circle maintains a sixfold gain since its market debut last month.
Three pivotal bills now hang in limbo: • The GENIUS Act sought federal oversight for stablecoins, mandating 100% reserves and monthly audits while permitting approved private entities to issue dollar-pegged tokens. Having cleared the Senate with bipartisan backing, it represented America’s first federal stablecoin framework. • The CLARITY Act aimed to classify digital assets as either securities or commodities, assigning jurisdiction to the SEC or CFTC. • A contentious Republican-backed provision banning Federal Reserve-issued central bank digital currencies (CBDCs).
Opposition emerged from within the GOP ranks. Georgia Representative Marjorie Taylor Greene, who voted against the rule, criticized the GENIUS bill for lacking a CBDC prohibition and disallowing amendments. She emphasized Trump’s January 23 executive order explicitly banning CBDCs, insisting Congress must codify this stance.
Trump’s Truth Social post earlier Tuesday had proclaimed the House would "vote to make America the undisputed leader in digital assets." Yet Republican infighting sabotaged his "Crypto Week" advocacy push.
As issuer of the USDC stablecoin controlling 24% of dollar-pegged token circulation, Circle stood to benefit significantly from the GENIUS Act. The legislation promised regulatory clarity that could have expanded America’s stablecoin market from hundreds of billions to $2 trillion, according to Treasury Secretary Janet Yellen. White House AI and crypto lead David Sacks predicted it would "unlock trillions in Treasury demand overnight."
The crypto industry has invested heavily in lobbying, deploying over $245 million in 2024 alone to elect pro-digital asset lawmakers. Meanwhile, the influential Fairshake PAC disclosed $141 million in reserves for securing regulatory wins and backing candidates through the 2026 midterms.
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