Written by: Ashley, Penny; BlockBeats (First published on May 9th)
Since Trump's return to the White House, the stablecoin bill that has been steadily progressing has recently encountered obstacles. The 'GENIUS Act' or the 'Guiding and Establishing National Innovation for Stablecoins Act' is a legislative proposal introduced by the U.S. Senate on February 4, 2025, aimed at establishing a comprehensive regulatory framework for "payment stablecoins" within the United States to promote financial innovation, protect consumers, prevent illegal financial activities, and consolidate the dollar's dominant position in the global financial system.
This milestone crypto bill encountered unexpected obstacles during negotiations. Nine key Democratic senators publicly stated on May 3rd that they would refuse to support the Republican-proposed amendment version. On May 9th, the Senate rejected the 'Stablecoin Innovation and Safety Act' with a vote of 48:49, with Democrats collectively voting against advancing the bill. The bill aimed to establish the first federal regulatory framework for stablecoins pegged to the U.S. dollar, which was a key focus of Trump's crypto policy.
On the same day, the long-standing case between Ripple and the SEC finally came to an end, and its connection with U.S. political groups was brought into the spotlight by Democrats, who openly emphasized the need to prohibit the Trump group from participating in cryptocurrency.
Political Group Interest Transfer, Rift Between Senate and House
... [rest of the text continues]White House spokesperson Anna Kelly argued that Trump's assets are managed by a family trust, denying any conflict of interest, and emphasized Trump's commitment to making the United States the "global crypto capital". However, Senator Richard Blumenthal has written to World Liberty Financial and Fight Fight Fight LLC (the companies issuing the $TRUMP meme token) on May 6th, requesting communication records with the Trump family, Trump Organization, and foreign governments to investigate potential conflicts of interest.
The GENIUS Act, which was originally expected to undergo a procedural vote this week, has been stalled due to ethical controversies and conflict of interest allegations. Bank Committee senior member Elizabeth Warren and other legislators believe the GENIUS Act could enable presidential profiteering, calling on the Senate to reject the bill. She distributed a newsletter to all Democratic senators, listing the bill's shortcomings in anti-corruption, consumer protection, financial system stability, and national security. The newsletter suggested that the bill should prohibit elected officials and their families from participating in stablecoin business to avoid conflicts of interest.
Meanwhile, Senator Jeff Merkley proposed the "Ending Crypto Corruption Act" on May 6th, which would prohibit the President, Vice President, Congress members, and their immediate family from profiting from crypto assets. The bill was co-sponsored by 10 Democratic senators, including Kirsten Gillibrand and Angela Alsobrooks, who were original co-sponsors of the GENIUS Act, indicating deep concerns within the Democratic Party about Trump's crypto business.
Additionally, stablecoin giant Tether was also a target. According to two anonymous Democratic aides, Senate Minority Leader Chuck Schumer (Democrat from New York) urged colleagues during a closed-door meeting on Thursday to refrain from committing support to the bill, advocating for further modifications through negotiation. He specifically questioned the bill's regulatory provisions for foreign companies like Tether. They pointed out that the GENIUS Act lacks strict oversight of foreign companies like Tether, potentially opening doors to money laundering and terrorist financing.
This morning, the U.S. Senate rejected the Stablecoin Innovation and Security Act with a vote of 48:49, with Democrats collectively voting against advancing the bill. The bill required 60 votes to proceed to the Senate's final voting procedure, while Republicans currently hold a slim 53-47 majority. Democrats demanded the inclusion of clear provisions prohibiting administrative officials, including former President Trump and his family members, from holding or trading cryptocurrencies, and strengthening anti-corruption clauses. Will policy prioritize consolidating U.S. dollar hegemony or prevent interest transfer? The crypto development path, compounded by partisan conflicts, may face more challenges in the future.
