The US Senate failed to advance the bipartisan GENIUS Act after a procedural vote blocked the stablecoin bill. Democrats reversed their support due to concerns linked to corruption allegations involving President Donald Trump. The decision delays the creation of a regulatory framework for stablecoins and pushes the bill back to the committee level.
Democrat Opposition Halts Progress on Stablecoin Bill
The GENIUS Act received stern opposition from Democratic Senators after they came up with a series of demands seeking stricter anti-money laundering and national security regulations. Ten of the bill’s supporters from Democratic ranks reversed their stance, arguing they had (still) unresolved concerns. Their opposition stalled the bill to the House for further voting.
As the May 26 deadline on the vote approached, Democrats called for an amendment before continuing. Nonetheless, the amendment to proceed failed and stalled the whole legislative process. This action resulted in political tension in the Senate and loss of bipartisan bill supporters.
Senator Elizabeth Warren spoke about her resistance, touching upon some problems related to Trump’s activities on a USD1 stablecoin project. She stressed the need to preserve financial integrity before progressing the legislation. Other’ Democrats backed her position and requested further protections in the bill.
Republicans Accuse Democrats of Political Motives
Several Republican Senators accused Democrats of playing politics rather than addressing the substance of the GENIUS Act. Senator Tim Scott blamed the outcome on political games driven by opposition to Trump. He said the Democrats focused more on stopping a Trump-backed initiative than regulating crypto assets.
Senator Cynthia Lummis expressed disappointment after the vote, emphasizing the bill’s bipartisan nature. She noted that the legislation was carefully designed to bring order to the growing stablecoin market. According to her, the failure to advance the bill undermines efforts to establish US leadership in digital finance.
The bill’s sponsor, Senator Bill Hagerty, accused Democrats of weakening America’s position in the global crypto race. He warned that delaying regulations could give international competitors like China an advantage. Despite this, Democratic leaders insisted that strong oversight must come before any market expansion.
GENIUS Act Collapse Deepens Crypto Uncertainty
The bill goes back to the committee stage and must be amended before it can be returned to the Senate floor. Senate Majority Leader John Thune is expected to reintroduce the bill for reconsideration next week. However, the growth of partisan conflicts can contribute to further delays in reaching a consensus.
In the House of Representatives, Republicans meet resistance to other crypto-related bills. Representative Maxine Waters attacked the rest of the crypto legislation, calling it a product of corruption linked to Trump. Her utterances indicate broader Democratic worries regarding transparency and security in the digital asset arena.
The collapse of the GENIUS Act makes it harder to set policy in light of mounting industry pressure for openness around stablecoins. Although some lawmakers continue to be hopeful for a rejoinder in future polling, uncertainty best describes the direction ahead. The coming weeks will be crucial for the digital assets legislation in the US.
FAQs
What is the GENIUS Act?
The GENIUS Act is a bipartisan bill aiming to regulate stablecoins through a federal framework in the United States.
Why did the Senate vote against it?
Democratic Senators withdrew support after raising concerns about national security and potential corruption involving a Trump-linked stablecoin.
What happens to the bill now?
The bill returns to the committee level for revision and will need to restart the legislative process to advance again.
Who supported the bill?
Several Republican and moderate Democratic Senators supported it, citing the need for regulatory clarity in the crypto market.
Will the bill be reconsidered?
Senator John Thune is expected to file a motion for reconsideration, possibly next week.
Glossary of Key Terms
- Stablecoin: A type of cryptocurrency designed to maintain a stable value by pegging it to a reserve asset like the US dollar.
- GENIUS Act: A proposed US bill focused on creating a regulatory framework for stablecoins.
- Procedural Vote: A legislative vote to decide whether a bill should advance to the next stage.
- Senate Banking Committee: A Senate body that oversees matters related to banks, financial institutions, and financial regulation.
- Anti-Money Laundering (AML): Legal frameworks aimed at preventing money laundering and financial crime.
- Digital Asset: A digital representation of value, including cryptocurrencies like Bitcoin or stablecoins.
- USD1 Stablecoin: A Trump-linked digital currency initiative mentioned in Senate debates.
- Motion to Reconsider: A legislative procedure to bring a previously failed bill back for another vote.
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