(ZeroHedge)—On Thursday, July 17, capping off what was dubbed “Crypto Week” by Congress, the US House just passed three digital assets related bills. Here is a breakdown of all that was passed:
The GENIUS Act:
The Senate’s stablecoin bill, by a vote of 308-122. By bringing regulatory clarity to the asset class, the law is expected to stimulate the growth of the stablecoin industry. The GENIUS Act first passed the Senate on June 17 by a vote of 68-30, with 18 Democrats supporting the bill and 2 Republicans (Senators Hawley and Paul) voting against it. Two Senators were not present (Senators Cotton and Kelly). Broadly, the GENIUS Act creates a regime for the issuance and regulation of U.S. dollar-backed payment stablecoins. By bringing regulatory clarity to the asset class, the legislation, if passed into law, is expected to stimulate the growth of the stablecoin industry.
What the bill does
- The bill sets forth standards for regulatory oversight, striking a balance between federal and state authorities.
- The bill allows payment stablecoins to be issued by subsidiaries of banks and non-bank entities. Banks would be overseen by their primary federal regulator, while non-bank entities would be overseen at a federal level by the Office of the Comptroller of the Currency (OCC) or under qualifying state regimes.
- Sets up reserve requirements, supervision and enforcement, ie at least 1 to 1 backing with U.S. dollars, short-term Treasuries (93 days or less), or similarly liquid assets.
- Requires Bank Secrecy Act (BSA)/Anti-money Laundering (AML) compliance for issuers.
- Mandates insolvency requirements with customer protections.
Other Key Provisions of the bill
- Bank Permissibility:
- Banks can issue stablecoins and act “as a principal or agent with respect to any payment stablecoin and payment of fees to facilitate customer transactions.”
- Preserves current custody practices, allowing banks to hold stablecoin reserves under existing rules.
- Carves out tokenized deposits from the legislation.
- Federal licensing preemption: Federal licensing supersedes and preempts any state licensing requirement for any federally chartered payment stablecoin issuer.
- Bank Secrecy Act / Anti-Money Laundering Requirements: Issuers shall be treated as a financial institution for the purposes of the Bank Secrecy Act; Issuers (domestic and foreign) must demonstrate the ability to freeze or burn tokens.
- “SAB 121” prevention clause: Prevents federal regulators from requiring custodied digital assets to be held on balance sheet.
- Capital treatment: A non-permitted stablecoin can NOT be treated as a cash or cash equivalent for accounting purposes.
- Fed Master Accounts: The bill stays neutral on Fed account access and does not alter who is currently legally eligible for Federal Reserve services or deposit access.
- Interest Payments: Prohibits domestic and foreign issuers from offering interest to holders, although it does not address 3rd parties or affiliates.
- Licensing: Provides both a state and federal (OCC) licensing path for non-bank issuers, although state issuers must get federal license once over $10B in assets.
- Reserve Authentication: Monthly public disclosures of reserve composition; Annual financial audits for issuers with market capitalizations exceeding $50 billion.
- Activity Limits: Creates limits on the types of activities a non-bank stablecoin issuer can conduct (ie issue & redeem stablecoins; manage reserves; and custody stablecoins).
- Non-Security clarification: Payment stablecoins are explicitly excluded from being classified as securities.
- Marketing restrictions: Prohibits the use of “USG”, “United State Government” or “legal tender” as part of materials and naming conventions; allows the use of “USD”.
- International Stablecoins: Non-compliant foreign issuers may be barred from U.S. markets unless they comply with U.S. regulations and/or are licensed by an approved similar regime.
- Conflict of Interest: Clarified that financial conflict of interest standards apply uniformly to both regular and special government employees, although the referenced statute in the bill carves out the President and Vice President.
- Big Tech company issuance: Restricts issuance by large U.S. public or foreign companies not primarily engaged in financial services, unless they meet certain standards (TBD by the Stablecoin Certification Review Committee (SCRC), which is made up of the Treasury Secretary, FDIC Chair, and Fed Chair or Vice Chair) and are unanimously approved by the SCRC.
The CLARITY Act:
The House’s digital assets market structure bill, by a vote of 294-134. This vote total is notable because it received 78 Democratic votes, a larger number than market structure legislation received in last Congress’ FIT21 bill.
- The CLARITY ACT establishes the framework to define digital assets and related technology and establishes the regulatory regime for digital asset exchanges and intermediaries.
- With the vote total, there is perceived momentum for market structure legislation going into the Senate, which is working on its own market structure bill.
Key provisions of the CLARITY Act:
- Bank Permissibility: The bill provides clarity for bank permissibility to trade and custody spot digital commodities by defining these activities as “financial in nature.”
- Custody in a Broker-Dealer: The bill prevents a future SAB 121 approach from the SEC. Although SAB 121 has been rescinded by the SEC in recent months, it forced public companies to hold custodied digital assets on balance sheet, which for banks would mean punitive capital treatment and in essence a strong disincentive to custody digital assets.
- Portfolio Margining: The bill includes a directive for the SEC and CFTC to provide for portfolio margining across securities, repo, securities lending / borrowing, futures, options, swaps and digital assets. This is a priority for both the traditional and digital assets markets.
- Capital Netting: The bill also directs the banking agencies to provide for cross-product netting in the risk-based capital and leverage rules, which has been an issue in traditional markets for quite some time and will be important for both traditional and digital assets markets.
- Deference to regulators: Considerable amount of policy development is left to future rulemakings by the SEC and CFTC.
- Intermediary Regulation Focused on Retail: Dealer registration is only required for off-exchange with retail; broker registration is only required for soliciting / accepting retail orders.
- Trading through SEC Broker Dealers, ATS, exchanges: Digital commodities can be traded through Broker-Dealers, ATS or national exchanges, granting SEC significant jurisdiction over the spot crypto markets.
- Digital Commodity Exchange Verticals: Exchanges are vested with SRO authority; no prohibitions on affiliations to traditional exchanges, CCPs or intermediaries; requires exchange to write conflicts of interest rules. Prohibited from having an affiliate that trades on the exchange for its own account.
- Direct Access: No requirements for exchange trading to occur through brokers or dealers.
- Speed to Market: Through provisional and notice registration processes and self-certification by exchanges of products to list, the bill provides an expeditious process to bring new products to market.
The Anti-CBDC Surveillance State Act:
By a vote mostly along party lines.
- This stand-alone bill attempts to prevent the Fed from issuing a retail CBDC, although it will be an uphill battle to move forward in the Senate, due to strong Democratic opposition.
- The House activity this week included a series of delays and last-minute internal GOP negotiations to get to yesterday’s floor vote, which were reported publicly, including involvement of President Trump, which ended with an internal GOP agreement to include anti-CBDC language in a future must-pass defense spending bill (the National Defense Authorization Act) (link).
Next steps:
- The GENIUS Act is slated to be signed into law by President Trump on Friday (7/18) at a White House ceremony.
- The CLARITY Act will now move to the Senate for consideration, although, as noted above, the Senate is working on its own market structure legislation. With the momentum from the CLARITY Act, including the relatively strong number of Democrats in support, though, Senate Banking Committee Chair Tim Scott (R-SC)’s goal of a September markup has increased potential, although still an uphill battle to get strong bipartisan support, which is required to get the 60 votes necessary to avoid a filibuster. The Senate Agriculture and Banking committees will work together on drafting legislation.
- The Treasury Department’s long-awaited Digital Assets report, mandated by the WH Executive Order earlier this year, is expected to be released soon. This report will likely push for market structure legislation, as well as touch on additional issues at the banking and regulatory agencies that are needed to meet the President Trump’s stated goal of making the U.S. the “crypto capital of the world.”
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
