Key Takeaways
- A group of Senate Democrats is planning to oppose the passing of the GENIUS Act, which could be voted on later this week.
- Some legislators want amendments to the stablecoin bill to exclude sitting presidents, congressmen, and their families from owning crypto.
- The move could jeopardize plans to create a clear regulatory framework for stablecoins and other cryptocurrencies if successful.
Senate Democrats are mounting a revolt against a crypto regulation geared towards streamlining the crypto industry, putting the GENIUS Act into jeopardy just a few days before a possible key vote later this week.
The bill, a unique piece of legislation that aims to create a regulatory framework for stablecoins, was supported by a pro-crypto president, Donald Trump, and a slew of new pro-crypto legislators in both parties. However, it now faces a revolt from Democrats who had supported it all along, even as Trump continues expanding his investments in the crypto space.
Democrats Vow Not to Support the GENIUS Act.
During Tuesday’s Senate session, leading House Financial Services Committee member Rep Maxine Waters blocked the hearing and called for new legislation to ban sitting Presidents and members of Congress from owning cryptocurrencies and digital asset firms. The US First family owns several crypto investments besides operating World Liberty Financial, whose stablecoin USD1 has shot into the top ten stablecoins by market capitalization.
At the same time, nine Senate Democrats have vowed not to support the GENIUS Act, which would narrow the stablecoin bill’s pathway to the threshold of 60 votes. Meanwhile, a senior Senate Banking Committee member, Sen Elizabeth Warren, circulated a memo to her fellow Senate Democrats urging them to demand amendments to address the bill’s national security concerns. The memo stated:
“If Congress is going to supercharge the use of stablecoins and other cryptocurrencies, it must include safeguards that make it harder for criminals, terrorists, and foreign adversaries to exploit the financial system and put our national security at risk.”
Conflict of Interest
The recommendations are about barring elected officials and their families from owning, buying, selling, or participating in stablecoin business ventures. The amendments state:
“Congress is writing laws that will sharply increase or decrease the value of stablecoin businesses, and the public should know that no one is making decisions to further their financial interests, including the President of the United States. The current version of the GENIUS Act contains no such restrictions.”
World Liberty Financial announced last week that it had inked a deal with an Emirati company to acquire the USD1 stablecoin and make a whopping $2 billion investment in Binance.
Targeting President Donald Trump
Last week, World Liberty Financial announced that an Emirati company planned to use the firm’s new stablecoin for a $2 billion investment in Binance, the world’s largest cryptocurrency exchange.
The efforts to amend the GENIUS Act seem to directly target US President Donald Trump, who is deeply involved in the cryptocurrency sector. Apart from the USD1 stablecoin, which is structured to channel millions of dollars towards the Trump-backed World Liberty Financial, there is also discontent about an upcoming gala dinner for the top $TRUMP meme coin holders set to take place later this month.
Conclusion
While some Senate Democrats are intent on blocking the GENIUS Act to block Trump from owning stablecoins or any other crypto while still in the office, others believe it could lead to unintended consequences. Ultimately, if the Senate Democrats succeed in blocking the crucial vote, they could jeopardize the efforts to create a clear regulatory framework for cryptocurrencies in the US.
Frequently Asked Questions
What is the purpose of stablecoins?
Stablecoins are designed to create a stable and reliable environment to increase cryptocurrency adoption and eliminate cryptocurrency’s speculative nature.
What is the Genius Act?
The Guiding and Establishing National Innovation for US Stablecoins Act of 2025, or the GENIUS Act, aims to establish a regime regulating stablecoins in the United States.
What is the aim of the stablecoin bill?
The bill would create the first-ever federal regulatory framework for stablecoins pegged to the dollar, thereby creating crypto-friendly regulations for stablecoins and other cryptocurrencies.
