Scott Bessent Torches Senate Over 48-49 GENIUS Act Stall—Is Washington Handing Crypto Dominance to Rivals?

Wall Street heavyweight Scott Bessent just unloaded on the Senate for letting the GENIUS Act die in a razor-thin 48-49 vote—while Dubai and Singapore stack their regulatory decks with crypto-friendly policies. Here’s why D.C. dysfunction might be the best thing that ever happened to offshore exchanges.

The bill’s collapse leaves U.S. innovators playing catch-up with jurisdictions that actually understand blockchain’s economic potential. Meanwhile, Senators who couldn’t tell a hash rate from an interest rate just prioritized short-term political point-scoring over trillion-dollar infrastructure.

Funny how the ’pro-business’ party suddenly develops regulatory arthritis when it comes to the fastest-growing asset class since the dot-com era—must be all those banker donors whispering sweet NIMBY-isms in their ears. The market won’t wait for Washington to get its act together.

Did the Senate Just Kill U.S. Crypto Dominance?

Scott Bessent labeled the bill a “once-in-a-generation opportunity” to assert dollar dominance through innovation.

For stablecoins and other digital assets to thrive globally, the world needs American leadership.

The Senate missed an opportunity to provide that leadership today by failing to advance the GENIUS Act.

This bill represents a once-in-a-generation opportunity to expand dollar…

He criticized the Senate for allowing state-by-state regulatory fragmentation to persist and warned that digital asset development could shift abroad without a unified federal framework.

The GENIUS Act, introduced in February by Senator Bill Hagerty (R-TN) and co-sponsored by prominent Republicans, including Chairman Tim Scott (R-SC) and digital assets advocate Senator Cynthia Lummis (R-WY), sought to provide a comprehensive federal framework for the issuance and regulation of stablecoins in the United States.

Despite early bipartisan momentum, the bill failed a procedural vote on May 8 after Senate Democrats abruptly pulled support over national security concerns, AML provisions, and last-minute resistance from key lawmakers.

Senator Mark Warner (D-VA), who opposed the bill, said its text was “not yet finished,” while others hinted at deeper political friction.

The Unspoken Political Tensions Fueling the GENIUS Act’s Demise

Some Democrats privately expressed discomfort with President Trump’s recent pro-crypto involvements, which they feared had tainted the legislative process with political overtones.

The bill’s failure has cast a shadow over the future of stablecoin regulation and broader crypto legislation, particularly ahead of the 2026 midterms when all House seats and one-third of the Senate will be up for grabs.

Senator Cynthia Lummis, a key co-sponsor, voiced her disappointment on X, stating that failing to pass the GENIUS Act was a step backward in securing America’s digital future.

My statement after the Senate failed to advance the GENIUS Act. pic.twitter.com/lARFxCPEg9

John Deaton, a well-known pro-XRP lawyer, called on lawmakers to rise above partisan divisions. “Senators need to place the country first, not politics. This bill had bipartisan support just a week ago. What happened?”

Decentralization vs. Control: The Ideological Clash Central to Stablecoin Debates

Ethereum co-founder Vitalik Buterin, while not directly commenting on the GENIUS Act, had previously warned against “centralized stablecoins becoming a tool for geographical control.” The implication is that a U.S.-denominated stablecoin framework could undermine crypto’s decentralized ethos.

Lawmakers argue that stablecoins like Tether’s USDT require oversight to prevent criminal exploitation.

In addition, according to a previous report, stablecoins make up the bulk of illicit transaction volume in 2024.

Our Money Laundering report reveals how bad actors now use crypto to launder funds from off-chain crimes — not just crypto-native crimes like ransomware. We explore advanced tracing techniques and how blockchain data is leading the fight against fincrime.https://t.co/32ApuphHpU

The collapse of TerraUSD further fueled debate. The crash erased $40 billion in value, raising concerns about consumer risks in decentralized systems. Proponents of regulation cite TerraUSD as evidence that even decentralized models can fail, leaving users vulnerable.

However, critics note a contradiction. Many “decentralized” stablecoins still depend on centralized elements, such as development teams or governance structures. The result is a paradox, as blockchain systems designed to eliminate trust still rely on it, just in different hands.

Frequently Asked Questions (FAQs)

The 48-49 vote was a procedural defeat, not the end. Under U.S. Senate rules, a motion to reconsider permits the Senate to revisit the bill, so the GENIUS Act can still be reintroduced or brought back to the floor for another vote after further negotiations or revisions.

Introducing USD-backed stablecoins is widely seen as reinforcing and extending U.S. dollar dominance globally by allowing cross-border transactions and expanding dollar access beyond traditional banking systems. Stablecoins tied to the dollar are expected to help maintain its status as the world’s reserve currency and boost demand for U.S. Treasury securities.

A U.S. digital dollar issued by the government or linked entities, like the TRUMP family’s USD1 stablecoin, would be centralized by design, contrasting with the core blockchain principle of decentralization.