Encryption Weekly Bill Stumbles: Procedural Vote Unexpectedly Fails

Originally seen as an important moment for the encryption industry in Washington, "Crypto Week" faced a significant setback this Tuesday. Three key encryption regulatory bills unexpectedly failed in a procedural vote, resulting in 196 votes in favor and 223 votes against. Notably, 13 Republican representatives joined forces with Democrats to cast opposing votes, preventing these bills from moving into substantive debate.

This result means that unless the House of Representatives passes the relevant rules of procedure again, these highly anticipated bills in the industry will not be able to proceed.

The Vision and Setbacks of Encryption Week

At the beginning of this week, the sentiment in Washington's encryption industry was high, with widespread expectations that these bills would pass smoothly. A political figure rallied for "Crypto Week" on his social platform, describing it as a key step for the United States to establish leadership in the digital asset space. He called on all Republican House members to vote in favor and firmly believed that one of the bills would put the U.S. far ahead of other countries in this field.

The cryptocurrency legislation that has been hindered this time includes three bills that are crucial to the industry:

1. The bill regarding the regulation of stablecoins: Aimed at providing a clear regulatory framework for stablecoins, it is seen as key to promoting institutional adoption.
2. Digital Asset Classification Act: Aimed at clarifying the regulatory classification of digital assets and determining the categories of assets regulated by the SEC or 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 considered the cornerstone of the United States' establishment of a comprehensive and predictable regulatory framework for digital assets, which could bring much-needed certainty to the market, attracting more capital and innovation.

Divisions Within the Republican Party

In this vote, the opposition votes of 13 Republican representatives attracted widespread attention. Among them, Marjorie Taylor Greene from Georgia publicly explained her stance. She stated that a certain bill failed to include a ban on central bank digital currency (CBDC), and the speaker did not allow related amendments to be submitted. Greene emphasized that Americans do not need a central bank digital currency controlled by the government.

The Speaker of the House is therefore in a dilemma. He 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. This reflects the strategic dilemma faced by Republican leadership in balancing the demands of different factions within the party and ensuring legislative viability.

Subsequent Development and Market Response

After the news of the failed vote came out, stocks related to encryption fell sharply. Stablecoin issuer Circle's stock price dropped by more than 7%, a certain encryption trading platform fell by over 4%, and digital asset company MARA Holdings' stock price also decreased by 2%.

The House Speaker has announced a desire to restart procedural voting on the encryption bill on Wednesday local time. He emphasized that "these encryption bills are a shared priority for the White House, the Senate, and the House of Representatives." According to reports, a certain political figure expressed being very "angry" about the voting results and is communicating with the relevant lawmakers.

Nevertheless, some industry analysts remain optimistic about the future of the legislation. TD Cowen policy analyst Jaret Seiberg expects the House to pass some form of the bill, as high-level figures are pushing for its enactment. He believes that even if members of the House "Freedom Caucus" oppose accepting the Senate version of the bill, they may ultimately make concessions.

Cody Carbone, CEO of Digital Chamber, is also confident about the final passage of the bill. He pointed out that the best way to address the ban on CBDCs is through a certain piece of legislation: "If lawmakers are interested in banning CBDCs and competing with the digital currencies issued by other countries, then the way to do so is through this bill, and allowing the private stablecoin market to thrive in the U.S."

This setback confirms a reality: in Washington, even agendas strongly promoted by high-level officials can be defeated by the subtle power balance within the party. When technological innovation meets political games, the "compliance path" of encryption is bound to be full of challenges.