Senate Torpedoes Stablecoin Progress as GENIUS Act Dies in Committee

Washington delivers another masterclass in killing innovation—this time taking aim at the $150B stablecoin market. The so-called GENIUS Act, which promised regulatory clarity for dollar-pegged crypto, got gutted faster than a DeFi rug pull.

Key details: Bipartisan talks collapsed after last-minute lobbying from banks (shocker). Now issuers face more limbo—just as Tether hits another ATH. Guess some folks prefer their monetary tech stuck in 1995.

Bottom line: When Congress moves slower than Bitcoin transactions, maybe it’s time to build offshore. Bonus irony? The vote happened hours after BlackRock filed a new stablecoin patent. Wall Street always eats first.

Republicans blame democrats for derailing stablecoin bill

Republicans were quick to seize on the Democrats’ reversal. Senator Tim Scott, a senior member of the Banking Committee, said Democrats were allowing their animus toward President Trump to get in the way of making progress. 

He called it “Trump Derangement Syndrome” and said Democrats would go so far as to damage the US’s digital future to prevent Trump from scoring what they imagined was a win.

The pro-crypto Republican Senator Cynthia Lummis said she was “deeply disappointed“ by the outcome. She said it had been a significant bipartisan bill that was thoughtfully designed to regulate stablecoins, protect consumers, and help the US remain competitive.

In an X post, Senator Bill Hagerty, who introduced the bill, stated that Democrats just unilaterally ceded American leadership capability in the digital asset industry to the CCP because they fear the far-left radicals of their party.

Congress stalls progress on stablecoin framework

Senate majority leader John Thune said he would offer a motion to reconsider the bill next week. That means the GENIUS Act could come up for another debate. But it’s unclear whether the current political climate will allow a second round to survive.

The bill had initially been slated for a final vote by May 26. It would have been the first significant US cryptocurrency regulation if passed — a milestone for the industry.

Now, the entire process may have to start over. The bill may return to the committee level. At this point, lawmakers would likely try reintroducing trust and a new balance.

Another high-profile crypto proposal was recently derailed by a powerful Democrat, Representative Maxine Waters, who described the plan as “Trump’s corruption in disguise.”

It’s a turning point for US crypto policy. Crypto regulation became a political battleground during the 2024 presidential race. The vote’s aftermath suggests digital asset legislation is also almost certainly contentious, with DEEP lines drawn and more than a little political math set to be done.

Tensions on Capitol Hill over President Donald Trump’s various cryptocurrency ventures escalated on Tuesday and threatened to derail the digital asset sector’s hope of legislation by the end of this year as a top Democratic lawmaker stalled efforts to debate a bill. Although Congress had appeared likely earlier this year to pass legislation governing digital assets for the first time, Democrats have grown increasingly frustrated as Republican Trump and his family members have promoted their personal crypto projects.

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