Congress Passes Crypto Bills Banning Fed CBDC, Mandating Stablecoin Backing

Coin WorldFriday, Jul 18, 2025 4:18 am ET

3min readOverviewThe 5 Ws

– U.S. Congress passed crypto bills banning Fed retail CBDCs and mandating stablecoin cash backing, backed by SEC, Coinbase, and blockchain advocates.

– The Digital Asset Market Clarity Act establishes SEC-CFTC oversight while blocking central bank digital currency development at the Federal Reserve.

– Bipartisan GENIUS Act requires stablecoin reserves and audits, likely to be signed by Trump despite Democratic concerns over his crypto conflicts of interest.

– Critics highlight regulatory gaps and ethical risks, while supporters argue the bills create a balanced framework for innovation and investor protection.

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The U.S. Securities and Exchange Commission (SEC), Coinbase, and the Blockchain Association have all expressed support for a series of crypto-related bills that have recently gained traction in Congress. These bills aim to provide a clearer regulatory framework for the cryptocurrency industry, which has long been a contentious issue amidst political debates.

Ask Aime: How does the SEC’s support for crypto-related bills impact the cryptocurrency market?

The centerpiece of the package is the Digital Asset Market Clarity Act, which outlines how the SEC and CFTC will share oversight of digital assets. This bill has been approved by a 294–134 vote and is now headed to the Senate, where a heated debate is expected. A key addition to the bill includes language banning the Federal Reserve from issuing a retail-facing central bank digital currency — a controversial move that narrowly passed as a standalone provision before being folded into the broader legislation.

Another measure, the GENIUS Act, passed with a strong 308–122 majority. The bill mandates that U.S.-issued stablecoins be fully backed by cash or equivalents and introduces audit requirements for issuers with large market caps. With bipartisan backing, it’s likely to be signed into law by President Trump within days.

Industry voices were quick to celebrate the votes. Blockchain Association CEO Summer Mersinger stated that “America is ready to lead in digital finance,” while Coinbase President Emilie Choi called the outcome “a giant step forward” for crypto innovation in the U.S. Supporters in Congress echoed those sentiments, with Republican Sen. Tim Scott praising the GENIUS Act as a major win for financial innovation and consumer protection, noting that it aligns with Trump’s broader goal of establishing U.S. dominance in digital payments.

Ask Aime: How will the SEC and CFTC share oversight of digital assets under the Digital Asset Market Clarity Act?

However, the legislation wasn’t without controversy. Democratic lawmakers raised ethical concerns over President Trump’s deep involvement in crypto ventures — including token launches and mining investments — which reportedly earned his family over $600 million. Rep. Maxine Waters warned of unchecked conflicts of interest and criticized the Clarity Act for lacking provisions to prevent sitting officials from profiting off crypto.

Meanwhile, SEC Chair Paul Atkins, a Trump appointee, endorsed the GENIUS Act, saying it provides a workable regulatory foundation for stablecoin development, including safeguards against systemic risk. The week leading up to the votes saw late-night negotiations and intense backchannel talks. Sources confirmed that Trump personally intervened to push for the CBDC ban’s inclusion in the Clarity bill, despite opposition from some GOP leaders. A final compromise secured enough support to send all three bills forward.

With the legislative package now in the hands of the Senate, the spotlight turns to what could become a defining battle over the future of digital finance in the United States. The Senate Agriculture Committee held a hearing to discuss the market structure legislation for cryptocurrencies. This hearing comes at a time when the political landscape is fraught with controversy, making the passage of these bills all the more challenging. The ranking member of the committee emphasized the need for a comprehensive regulatory approach that balances innovation with consumer protection.

Coinbase, one of the leading cryptocurrency exchanges, has welcomed the proposed bills, stating that they represent a significant step forward in establishing a clear and fair regulatory environment. The company has long advocated for regulatory clarity, arguing that it is essential for the growth and stability of the cryptocurrency market. Coinbase’s support for the bills underscores the industry’s growing recognition of the need for regulatory oversight.

The Blockchain Association, a prominent advocacy group for the blockchain and cryptocurrency industry, has also voiced its support for the legislation. The association has been actively engaged in lobbying efforts to promote the bills, highlighting their potential to foster innovation and protect investors. The association’s endorsement adds weight to the argument that these bills are necessary for the long-term sustainability of the cryptocurrency ecosystem.

The political storm surrounding these bills is not without its challenges. Critics argue that the proposed legislation does not go far enough in addressing the risks associated with cryptocurrencies, while others contend that it imposes unnecessary burdens on the industry. Despite these objections, the support from key stakeholders like the SEC, Coinbase, and the Blockchain Association suggests that there is a growing consensus on the need for regulatory clarity.

The SEC, in particular, has been at the forefront of efforts to regulate the cryptocurrency market. The agency has been working to develop guidelines that would provide a clear framework for the issuance and trading of digital assets. The support for the bills from the SEC indicates that the agency is committed to finding a balanced approach that protects investors while fostering innovation.

The passage of these bills would mark a significant milestone in the regulation of the cryptocurrency industry. It would provide much-needed clarity for businesses operating in the space, as well as for investors looking to participate in the market. The support from key stakeholders suggests that there is a growing recognition of the need for a regulatory framework that can adapt to the rapidly evolving landscape of digital assets.