House Republicans Stall Passage of GENIUS Act, Impacting Stablecoin Regulation

On July 15, 2025, a faction of right-wing House Republicans disrupted the legislative process by halting the progression of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a bill designed to establish the first comprehensive regulatory framework for stablecoin issuers. This legislative impasse represents a significant setback for President Trump and GOP leaders, who had aimed to expedite the bill's passage.

The GENIUS Act, introduced by Senator Bill Hagerty (R-Tenn.) on May 21, 2025, aims to create a regulatory framework for payment stablecoins, mandating stringent standards for reserves, audits, and transparency for issuers. It also seeks to establish a dual federal and state supervisory system to mitigate financial stability risks and protect consumers. The Senate passed the bill in June with a 68-30 bipartisan vote, reflecting broad support for establishing clear regulations in the rapidly growing stablecoin market.

However, a faction of right-wing House Republicans is pushing to bundle the GENIUS Act with two other cryptocurrency-related bills under consideration. This move would necessitate the already Senate-approved GENIUS Act to be reconsidered by the Senate, introducing significant delays. House Speaker Mike Johnson (R-LA) indicated that these members are advocating for this bundling approach, which has led to the stalling of the bill's progression.

The legislative uncertainty has had immediate market repercussions. Shares in Circle Internet, a prominent stablecoin company, dropped nearly 5% following the House developments. This decline reflects investor concerns over the regulatory environment for stablecoins and the potential delays in establishing a clear framework.

Treasury Secretary Scott Bessent labeled the bill a “once-in-a-generation opportunity” to assert dollar dominance through innovation and criticized the Senate for missing the chance to provide American leadership in the crypto space. The internal GOP discord highlights the complexities of cryptocurrency regulation and the challenges in achieving consensus within the party. The push to bundle the GENIUS Act with other cryptocurrency-related bills reflects differing strategic approaches to crypto legislation. This legislative impasse underscores the broader debate over the role of government in regulating emerging financial technologies and the balance between innovation and consumer protection.

The stalling of the GENIUS Act in the House represents a critical juncture in the U.S. approach to cryptocurrency regulation. The outcome of this legislative process will have significant implications for the future of stablecoins, the broader crypto market, and the U.S. financial system's adaptability to emerging technologies.