(LibertySociety.com) – Senate Democrats abruptly withdrew support for a bipartisan cryptocurrency bill that had been months in the making, blocking legislation aimed at regulating stablecoins amid concerns over Trump family crypto ventures.
At a Glance
- The GENIUS Act, which would have created the first U.S. regulatory framework for stablecoins, failed in a 48-49 Senate vote
- Democratic support collapsed after an Abu Dhabi-backed firm invested in Trump’s cryptocurrency venture
- Democrats cited concerns about anti-money laundering measures, national security, and potential conflicts of interest
- Republicans accused Democrats of playing politics and obstructing innovation in the cryptocurrency space
Bipartisan Bill Collapses in Senate Vote
A major cryptocurrency regulation bill that had gained momentum with bipartisan support failed to advance in the Senate this week. The GENIUS Act, which would have established America’s first comprehensive regulatory framework for stablecoins, fell short in a procedural vote of 48-49. The legislation represented months of negotiation between Republican and Democratic lawmakers to create rules governing digital tokens that are pegged to stable assets like the U.S. dollar.
Senate Majority Leader John Thune, who strategically voted against the measure to preserve the option of bringing it back later, expressed frustration with Democrats’ last-minute opposition. “If Democrats were interested in further changes, as they claim, they would have had the chance to make those changes on the floor, all they had to do was vote for cloture. Not every bill that comes to the floor is a final bill,” Thune stated.
U.S. politicians reach bipartisan agreement on stablecoin bill
Republicans and Democrats in the U.S. have reached a bipartisan agreement on the GENIUS Act, a stablecoin regulation bill, according to a report published by @Utoday_en. The agreed bill text has not been released…
— CoinNess Global (@CoinnessGL) May 7, 2025
Trump Connection Triggers Democratic Reversal
Democratic support for the legislation collapsed following revelations that an Abu Dhabi-backed firm had invested in a cryptocurrency venture linked to former President Donald Trump. This investment triggered concerns among Democratic lawmakers about potential conflicts of interest and foreign influence. Senate Majority Leader Chuck Schumer reportedly advised Democrats not to commit to voting for the bill, seeking to extract additional concessions from Republicans.
“Democrats who both support and oppose the GENIUS Act agree that green lighting Donald Trump’s corrupt stablecoin deals is wrong. We need to make sure we fix this in the bill, or else the GENIUS Act will simply facilitate Trump’s crypto corruption,” Democratic Sen. Elizabeth Warren said.
Democrats sought to include provisions that would bar executive branch members from owning or trading cryptocurrency and attempted to add stronger anti-corruption measures. A key demand to prohibit elected officials from issuing stablecoins was ultimately removed due to constitutional concerns. Warren and Senator Jeff Merkley expressed alarm about the potential for corruption, saying: “The opportunities for grift — in which the Trump Administration offers favors to the UAE or to Binance in exchange for their massive payouts — are mind-boggling.”
Republicans Decry Political Obstruction
Republican senators accused Democrats of intentionally blocking the legislation for political purposes rather than policy concerns. Senator Tim Scott, a co-sponsor of the bill, delivered a sharp rebuke to his Democratic colleagues following the failed vote.
“Democrats put partisanship above policy and obstruction above innovation when they blocked a vote on the GENIUS Act – bipartisan legislation they helped write – that would help ensure innovation happens here in the United States. This was not about the substance of the bill; it was about appeasing the most radical elements of their party who want to punish President Trump and stop his agenda at all costs, but it’s the American people who will pay the price.”
Senate Majority Leader John Thune echoed these sentiments, suggesting Democrats were more interested in denying Republicans a legislative win than addressing legitimate policy concerns. “It 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,” Thune remarked.
Future of Crypto Regulation Remains Uncertain
Despite the setback, Republican lawmakers have pledged to continue pursuing digital asset legislation. Senator Scott affirmed that “Republican colleagues and I are not done fighting – we will continue to work on digital assets legislation to help make the United States the crypto capital of the world.” The GENIUS Act had included provisions for customer protections, national security safeguards, and measures to promote financial stability in the rapidly evolving cryptocurrency market.
Not all Republicans supported the legislation. Senator Rand Paul expressed skepticism about establishing new regulations, stating, “I’m not a real big fan of federal regulations period, much less starting a whole new scheme for a whole new industry that exists and seems to be doing OK without federal regulations.” The collapse of the bipartisan effort leaves the future of stablecoin regulation uncertain as the cryptocurrency industry continues to evolve without clear federal guidelines.
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