With the cryptocurrency legislative world being murky, opaque, and rife with shenanigans and political machinations. Recent events in the now-chaotic U.S. House of Representatives underscore this growing reality. Plenty of progress has been made, and some measures do have bipartisan support. Critical digital asset legislation is stalled, leaving the industry in a state of limbo with no clear path forward. This article dives into the “Carnage of Crypto Week.” It explores the reasons behind these holdups, shines a light on who’s making the moves, and what it all may mean for the crypto space and upcoming regulation.

Introduction to the Crypto Week Situation

Instead, the 118th House of Representatives has largely played the role of a lawmaker drafting the playbook. It’s a story filled with remarkable triumphs, profound struggles and even scandal on the journey. FIT21 passed the House on May 22, 2024 with broad bipartisan support. On that very same day, they moved Majority Whip Emmer’s CBDC Anti-Surveillance State Act of 216-192 on the same day. It seems like momentum has come to a standstill since then. Their unprecedented “Crypto Week” to move those and other historic bills was almost successful, but sadly didn’t get the job done. This outcome further illuminated the chasms and complexities within the Republican Party and the legislative environment as a whole.

Overview of Recent Events

Originally, “Crypto Week” was supposed to be a time of great progress moving digital asset legislation forward. House Republicans had promised to advance all of those key bills. These were the CLARITY Act, the Anti-CBDC Surveillance State Act, and the Senate’s GENIUS Act. These bills attempt an impressive regulatory framework clarification. They help assuage fears that, if implemented, government surveillance would be an intrinsic part of central bank digital currencies (CBDCs). Yet, internal dissension and strategic calculation resulted in delays, preventing these bills from receiving full debate and vote.

Importance of Digital Asset Legislation

The impact of this delay in reconciliation and passing these bills together cannot be understated, especially for the crypto industry here in the United States. The industry is right now operating in this regulatory gray area, with no clear framework laid out. This regulatory fog prevents innovation and discourages large, institutional investment. Without a visible or articulated digital asset policy, the U.S. is left with no alternative but to act on enforcement actions. This results in patchwork and inconsistent interpretations of the same laws, making for an unclear and often unfriendly climate for crypto companies. Companies may choose to postpone product launches or plans for U.S. expansion. This unknown is causing them to hold off until further guidance is more clear-cut. The U.S. risks falling behind other jurisdictions that are actively developing clear regulatory frameworks, potentially losing its competitive edge in the global digital asset market.

The Role of the House GOP

As with much else in DC these days, the House GOP’s role in the stalled crypto legislation is key to understanding the current situation. There are bipartisan efforts afoot on crypto, yet deep-seated disagreements still exist. Democrats and Republicans continue to disagree sharply about how broad, what form, and who will oversee digital assets. These disagreements, coupled with internal divisions within the Republican party, have created a challenging environment for advancing comprehensive crypto legislation.

Key Members Involved

Still, a handful of important members of the House GOP hold the keys to steering the future of digital asset regulation. Emmer, who has been a vocal advocate for crypto even before taking over as Majority Whip, has introduced the Anti-CBDC Surveillance State Act. To that end, we’re glad that Representative Dusty Johnson has been keen to push passage of the CLARITY Act, and the Senate’s GENIUS Act. Additionally, Chairman Hill, Chairman Thompson, Subcommittee Chairman Steil, and Subcommittee Chairman Johnson have been instrumental in drafting and promoting digital asset market structure legislation. On May 5, 2025, the members released a bipartisan, collaborative discussion draft on establishing a digital asset market structure. This reflects their continued firm efforts to build a robust regulatory framework.

Reasons for Delaying Legislation

The motivations for holding up the crypto legislation are multiple and show the complicated political forces at work. Internal divisions within the Republican party, particularly regarding the scope and nature of crypto regulation, have contributed to the delays. Some Republicans express in their views concerns about the risks posed by these digital assets and call for a measured approach to regulation. On the flip side, some others are welcoming and excited to encourage innovation and crypto-related growth. Additionally, the involvement of former President Trump and his stance on crypto may be influencing the decisions of some House Republicans. Absent that front, it’s been tough to get traction on what would have been a fruitful “Crypto Week” agenda.

Implications of the Stalled Bills

The stalled crypto bills hold significant stakes for the crypto market, investors, and the overall financial landscape. Regulatory vagueness breeds uncertainty, the enemy of positive market sentiment and the friend of dissuading investment. Conversely, it can result in more enforcement actions and regulatory scrutiny, adding to the already complex and hostile operating environment for crypto businesses.

Impact on the Crypto Market

Additionally, the lack of protective regulations increases volatility and uncertainty in the crypto market. Without a clear legal framework, crypto businesses will find it difficult to attract institutional investment. This investment is hugely important to their long-term growth and stability. The market is still susceptible to manipulation and fraud. This is largely due to having fewer protections afforded to investors. The U.S. would be in serious danger of getting left behind while other countries establish obvious regulatory environments. So without quick action, America risks ceding its competitive advantage in the global crypto marketplace.

Potential Consequences for Investors

Investors suffer multiple losses It’s not just investors who have taken a hit from these stalled crypto bills. Regulatory guidance is universally thin on the ground. Larger market impacts This uncertainty complicates investors’ ability to understand the risks and rewards of investing in digital assets. This ambiguity can create greater volatility and risk of loss. Regulatory risk Investors are seeing a heightened level of regulatory scrutiny and enforcement – especially by the SEC. This is particularly the case if they extend into uncharted territory without clear definitions or rules of the road.

Here's a list of the potential consequences for investors due to the stalled crypto bills:

  • Increased volatility in the crypto market.
  • Difficulty in assessing risks and rewards of digital asset investments.
  • Potential for increased regulatory scrutiny and enforcement actions.
  • Uncertainty regarding the legal status of digital assets.

Future Outlook for Digital Asset Regulation

Even with the current disappointments, all is not lost for a favorable outcome on digital asset regulation moving forward. We know that key members of Congress are continuing to work actively to establish a more robust and consistent regulatory framework for crypto. This ongoing push illustrates the growing institutional interest in DC with digital assets and further emphasizes the U.S. need to remain competitively focused on the global stage.

Expected Developments in Legislation

Looking forward, we can anticipate a few key trends as digital asset legislation is enacted. Key members of Congress are actively working on drafting and promoting legislation. Their stated intent is to bring more transparency and predictability to the cryptocurrency space. Legislative efforts will first aim to clarify what exactly the legal status of digital assets even is. We will create regulatory structures for crypto exchanges and custodians and combat money laundering and terrorist financing. The Financial Services Committee held a hearing titled “Navigating the Digital Payments Ecosystem: Examining a Federal Framework for Payment Stablecoins and the Consequences of a U.S. CBDC” on March 11, 2025. The Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence held its first digital asset market structure hearing of this Congress on April 9, 2025. On 4/4/25, Chairman Hill & Chairman Thompson Joint Op-Ed Unveiling. We applaud the work of Rep. McHenry and Chair Gensler for laying out their vision for digital asset market structure legislation focused toward the 119th Congress. Taken together, these efforts indicate that Congress is likely to continue making digital asset regulation a major priority in the upcoming years.

Predictions for the Crypto Industry

What lies ahead for the crypto industry in the U.S. will depend on the future regulatory landscape. Over the next several years, these regulations will be key in determining the industry’s direction. If the U.S. can develop a clear and coherent regulatory framework that fosters innovation while protecting investors and consumers, the crypto industry has the potential to thrive. If the regulatory environment remains murky, the industry may encounter serious headwinds to growth. In reality, it may have to relocate to friendlier jurisdictions altogether.

The 11th hour drama with the stalled crypto bills is a microcosm of the challenges and complexities of developing a legislative framework to regulate digital assets. While there have been setbacks, influential members of Congress are stepping up to the challenge to catalyze real change. In addition, strong institutional interest in cryptocurrency shows that it’s still all within reach. The future of the U.S. crypto industry will depend heavily on the regulatory landscape that emerges over the next couple of years. Policymakers need to work hand-in-hand to find the right framework that enables innovation while protecting investors and consumers.

  1. Increased Institutional Adoption: As regulatory clarity improves, more institutional investors are likely to enter the crypto market, bringing greater stability and liquidity.
  2. Innovation and Growth: A supportive regulatory environment can foster innovation and growth in the crypto industry, leading to the development of new products and services.
  3. Global Competitiveness: The U.S. can maintain its competitive edge in the global crypto market by developing a regulatory framework that is both innovative and responsible.

The current situation with the stalled crypto bills highlights the challenges and complexities of regulating digital assets. While there have been setbacks, ongoing efforts by key members of Congress and increasing institutional interest in crypto suggest that progress is still possible. The future of the crypto industry in the U.S. will depend on the regulatory environment that emerges in the coming years, and it is essential that policymakers work together to create a framework that fosters innovation while protecting investors and consumers.