The United States Senate has decided to hit the pause button on a stablecoin regulatory bill in light of increasing unrest, caused primarily by President Donald Trump’s foray into the cryptocurrency world. Thursday saw the Senate voting in favor of a temporary halt on the bill through a procedural process known as cloture.
Recent days have seen a rise in political tensions as Republicans, supported by some Democrats, strive to pass bills that not only regulate stablecoins but also introduce comprehensive rules for the crypto industry. However, Trump’s engagement with digital assets, his memecoin, and high-profile dinners have caused a potential disruption to bipartisan hopes.
Democratic Senators, including Ruben Gallego, Mark Warner, Raphael Warnock, Lisa Blunt Rochester, Catherine Cortez Masto, and others, expressed multiple concerns about the stablecoin bill last weekend. They called for stronger requirements for foreign issuers and enhanced anti-money laundering measures.
On Thursday, Senator Warner stated that he couldn’t, “in good conscience ask my colleagues to vote for this legislation when the text isn’t yet finished.” He expressed hope that the bill would be ready for floor consideration the following week.
The Senate Banking Committee, led by Republicans, shared a statement titled “Myth vs. Fact: The Genius Act,” aiming to dispel some of the claims made by lawmakers. They described the bill as the outcome of extensive bipartisan negotiations and consultations with industry experts, academics, and government stakeholders.
The Genius Act, which was advanced by the Senate Banking Committee in March, demands that stablecoins have 100% reserve backing with U.S. dollars and other liquid assets, along with other requirements. It also bars foreign issuance in the U.S. but allows circulation of foreign-issued stablecoins in the U.S. secondary market.
Meanwhile, the House Financial Services Committee advanced a somewhat similar bill but differed in the regulation of issuers and foreign issuers like Tether. Democrats have also shown increasing concerns over President Trump’s involvement in cryptocurrency.
Trump’s family has actively participated in the crypto world, launching their memecoins just days before his inauguration and the launch of Trump-backed World Liberty Financial, which recently launched its own stablecoin. A recent crypto dinner hosted by Trump to raise funds for the MAGA Inc. super PAC saw plates priced up to $1.5 million, marking it as one of the most expensive political fundraisers in recent times.
During a planned joint hearing focused on crypto, several Democrats, led by ranking member Rep. Maxine Waters, boycotted the event, citing Trump’s crypto ownership as their reason.
The future of the bill remains uncertain as senators continue negotiations. Bo Hines, Executive Director of the Presidential Council of Advisers for Digital Assets, urged Democrats to make a decision for or against innovation, hinting at the potential for America to secure its position as the crypto capital of the world.
