In a significant setback for the cryptocurrency sector, the U.S. Senate has stalled the progression of a crucial stablecoin bill.
According to The Hill, the GENIUS Act, intended to establish a regulatory framework for payment stablecoins, failed to clear a pivotal Senate vote.
Last Thursday, the Senate faced a crucial decision on the GENIUS Act, which sought to introduce a regulated environment for payment stablecoins.
However, the bill did not gather 60 votes to advance, falling short by a margin of 48-49. Senate Majority Leader John Thune (R-S.D.), initially supporting the bill, tactically switched his vote to no. This strategic move allows for the potential reintroduction of the bill in the future.
Leading up to the vote, Senate Democrats withdrew their support following a push by Republicans for a rapid vote. Concerns were raised about perceived gaps in the bill concerning anti-money laundering measures and national security, among other issues.
Intensive negotiations had taken place for several days before the vote. There were indications of a potential agreement, but no consensus was reached by the time of the voting. Sen. Ruben Gallego (D-Ariz.) even requested a postponement of the vote to Monday for further review, which was ultimately rejected.
Expressing his views on the matter, Sen. Gallego emphasized, "The reason you're hearing some hesitancy, the legislation of this scope and importance really just cannot be rushed, and we need time both to educate our colleagues and people. We’re not shutting down. We don't want to shut this down to the point where we're ending all this work that we have put into it."
Senate Republicans expressed their frustration over what they perceived as obstruction by Democrats. Thune commented, "If Democrats were interested in further changes as they claim, they would have had the chance to make those changes on the floor. Not every bill that comes to the floor is a final bill."
Thune added to his critique by suggesting that the Democrats' resistance could be an attempt to deny a bipartisan victory that could be credited to Republicans and President Trump. "I just have to say frankly I just don’t get it. I don’t know what more they want. Which of course makes you wonder if this is about the bill at all. Or if it’s simply Democrats obstructing because they want to deny Republicans or President Trump a bipartisan win," he stated.
Senator Elizabeth Warren raised concerns about President Trump's involvement with cryptocurrencies, specifically pointing out a massive stablecoin transaction linked to foreign interests. "Trump is already using his stablecoin to get a cut of a $2 BILLION deal with a shady UAE fund," she wrote. "The Senate will vote on the GENIUS Act, a crypto bill which would make the President’s grift even easier. If we don’t fix that problem, no Senator should vote for it."
Secretary of the Treasury Scott Bessent criticized the Senate's inaction, hinting at potential repercussions in global financial innovation. "The world is watching while American lawmakers twiddle their thumbs. Senators who voted to stonewall U.S. ingenuity today face a simple choice: Either step up and lead or watch digital asset innovation move offshore," Bessent argued.
This vote's outcome places a damper on the momentum the cryptocurrency industry had seen, particularly during the Trump administration. Despite earlier support from some Democrats in Senate committees, the necessary consensus to push the GENIUS Act forward in the Senate remains elusive.
The crypto industry and its stakeholders are now left to reckon with the legislative hurdles and the ongoing geopolitical complexities influencing digital currency regulation.
As the debate continues, the pathway forward for stablecoin legislation appears fraught with challenges and uncertainties.