Encryption regulatory bill unexpectedly stalled, Washington's "Crypto Week" encounters a chill

What was originally seen as an important moment for the encryption industry in Washington, "Crypto Week," faced an unexpected setback on Tuesday. Three highly anticipated encryption regulatory bills failed to pass in procedural votes.

The voting results showed 196 votes in favor and 223 votes against. It is worth noting that 13 Republican representatives joined Democrats in casting votes against, which blocked the procedural motion to debate and advance the decision bill. This means that unless the House again passes the relevant rules of procedure, these bills will not be able to enter the substantive debate stage.

Before the vote, the sentiment in Washington's encryption industry was high, with widespread expectations that these bills would pass smoothly. Political figures on social media rallied for "Crypto Week," describing it as a key step for the U.S. to become the "undisputed, number one leader" in the digital asset space. He called on all Republican representatives to cast their votes in favor and stated that the related bills would put the U.S. light-years ahead of other countries in this field.

The blocked cryptocurrency legislation "package" includes three bills that are crucial for the industry:

1. Legislation on stablecoin regulation: Aimed at providing a clear regulatory framework for stablecoins, it is seen as key to unlocking broader institutional adoption.

2. Digital Asset Classification Rulemaking: Aimed at clarifying the classification rules for digital assets, specifying which assets should be regulated as securities by the U.S. Securities and Exchange Commission (SEC) and which should be regulated as commodities by the Commodity Futures Trading Commission (CFTC).

3. Bill to Prevent Central Bank Digital Currency (CBDC): Aimed at prohibiting the Federal Reserve from creating a central bank digital currency.

These bills are seen as the cornerstone of the United States establishing a comprehensive and predictable regulatory framework in the digital asset space, which could bring much-needed certainty to the market, attracting more capital and innovation.

However, divisions have emerged within the Republican Party. Reports indicate that several Republican congressmen, including Marjorie Taylor Greene, Chip Roy, Michael Cloud, and Anna Paulina Luna, cast votes against it. Greene publicly explained her position, stating that the relevant bill failed to include a ban on central bank digital currency (CBDC) and did not allow for related amendments to be submitted. She believes "Americans do not need a government-controlled central bank digital currency."

House Speaker Johnson stated that Republicans "are still in dialogue, answering questions," trying to appease and gain the support of these conservatives. However, he also acknowledged that bundling all three bills into one "big package" is not feasible.

After the news of the voting failure emerged, stocks related to encryption fell sharply: stablecoin issuer Circle's stock price dropped by more than 7%, a certain trading platform fell over 4%, and digital asset company MARA Holdings' stock price also decreased by 2%.

Nevertheless, some industry analysts remain optimistic about the future of the legislation. TD Cowen policy analyst Jaret Seiberg expects the House to pass the related bill. Digital Chamber CEO Cody Carbone is also confident about the bill's final passage, believing that passing the bill is the best way to address the prohibition of CBDCs.

This setback confirms a reality: in Washington, even a highly anticipated agenda can fall victim to the subtle power balance within the party. When technological innovation meets political maneuvering, the "path to compliance" for encryption is bound to be bumpy.