- The GENIUS Act failed to pass an initial Senate vote last week, stalling bipartisan efforts to regulate stablecoins
- Democratic opposition has intensified over concerns about President Trump’s financial ties to crypto ventures
- Senate leaders have initiated renegotiations, aiming for a revised vote as early as this week
The U.S. Senate’s attempt to advance the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act encountered a significant hurdle last week, failing to secure the necessary votes. The setback stems from growing Democratic concerns about potential conflicts of interest involving President Trump’s crypto ventures. Despite the procedural failure, Senate leaders are actively working on revisions, with a potential second vote anticipated in the coming days.
Trump’s Crypto Involvement Hampering Bill
The GENIUS Act, first proposed in February, is a proposed U.S. law aimed at establishing a federal regulatory framework for stablecoins, requiring issuers to meet licensing, reserve, and transparency standards under government oversight. Its goal is to legitimise stablecoins for broader use in finance while ensuring consumer protections and financial stability. Supporters say it will provide clarity and trust in the sector, but critics warn it could favour large players and enable political conflicts of interest, especially given concerns about ties between lawmakers and crypto ventures.
The Act faced a 48-49 vote in the Senate last week, falling short of the 60 votes required to advance. Notably, Senators Rand Paul and Josh Hawley joined Democrats in opposition, citing issues related to national security and the lack of transparency in the bill’s text. Democratic lawmakers have expressed heightened concerns following revelations about President Trump’s financial interests in the crypto sector, particularly the launch of the USD1 stablecoin by his family’s company, World Liberty Financial.
Another Vote Coming?
Senator Elizabeth Warren has been vocal about the need for stricter regulations, stating, “If the GENIUS Act goes forward without changes, Donald Trump will continue to line his pockets with his crypto scams.” Democrats are advocating for amendments that would prevent public officials from profiting from crypto ventures, enhance anti-money laundering measures, and ensure robust consumer protections. The introduction of the “End Crypto Corruption Act” reflects these concerns, aiming to ban federal officials and their families from investing in or endorsing digital assets.
Following the failed vote, Senate Minority Whip John Thune has initiated steps to bring the legislation back to the floor. Ongoing negotiations aim to address Democrats’ concerns and add clearer anti-money laundering safeguards and consumer protections.
Whether the changes will be enough to sway opposition remains uncertain, but momentum is building for a revised version to be introduced within the week.
