Encryption Week Faces Setback: Republican Libertarian Caucus Turns Against, GENIUS Stablecoin Bill Suddenly Under Procedural Attack

The U.S. "Encryption Week" faces setbacks! Infighting within the Republican Party leads to failure of key procedural vote

On Tuesday, House Republicans failed to pass a crucial procedural vote, causing the highly anticipated "encryption week" legislative agenda to come to a standstill. The result of 196 votes in favor and 222 votes against directly blocked the path for the "GENIUS Stablecoin Act," the "CLARITY Act," and the annual defense appropriations bill to enter debate or a full House vote.

The bundling strategy has sparked infighting within the Republican Party, with the Libertarian faction becoming the main opposition force

This setback stems from serious divisions within the Republican Party. Members of the House Freedom Caucus voted against the measure due to opposition to bundling unrelated legislation, which became a key factor in the failure of the vote.

The White House's push for the GENIUS Act encounters obstacles, and the regulatory process for stablecoins faces unforeseen changes

The GENIUS Act aims to establish a regulatory framework for stablecoins and originally had bipartisan support, receiving endorsements from both the Senate and the White House. Reports indicate that President Trump has prioritized the bill and urged Congress to pass it as is. House Majority Leader Steve Scalise acknowledged divisions within the party, stating, "I am one of those hoping to see the entire package passed, but the President and the Senate do want us to push the GENIUS Act first. The question is, when the President has clearly requested that the GENIUS Act be sent to him for signature as is, should we still play political games with the Senate bill?"

Encryption weekly agenda is fully suspended, and defense spending is also affected

The failure of this vote completely disrupted the milestone week plan for encryption policy set by Republican leaders. Due to the blockage of bundling rules, not only was the key encryption bill put on hold, but the associated defense spending bill also fell into a stalemate. Currently, the "encryption week" agenda has effectively come to a standstill.

The future path is unclear, and the legislative window may close until 2026

Republican leaders are weighing their next steps. They may try to push the procedural rule again later this week. However, the road ahead is filled with uncertainty. Leadership must decide whether to split the bundled bill or renegotiate the terms with opposition members. The GENIUS Act, which was seen as likely to pass easily, has encountered an unexpected delay in the House.

The market and regulatory process face significant risks

If the "GENIUS Act" does not pass this week, it will significantly impact the sentiment of the cryptocurrency market and seriously hinder the regulatory process for stablecoins in the United States. Congress will enter its recess in early August. The September agenda will focus on government funding and defense matters. This means that the next feasible legislative window may not come until the fall of 2025 or even January 2026—by which time policy priorities may have shifted, risking the loss of opportunities for cryptocurrency regulation.