Stablecoin Showdown: Senate Democrats Bail on Crypto Bill—Leaving Regulation in Chaos
Washington’s latest crypto drama just got messier. Senate Democrats yanked support from a pivotal stablecoin bill—torpedoing what could’ve been the first major US crypto regulation. The move leaves the industry in limbo (again) while politicians dust off their favorite hobby: kicking the can down the road.
Behind the scenes: Lobbyists are scrambling, Treasury officials are sighing, and Bitcoin maximalists are smugly tweeting ’told you so.’ Meanwhile, stablecoin issuers keep printing money—literally—because when has regulatory uncertainty ever stopped finance from finding a workaround?
Final thought: If Congress can’t even agree on dollar-pegged tokens, maybe decentralized stablecoins will win by default. Nothing unites rivals like a common enemy—in this case, lawmakers’ paralysis.
Who signed? Who blocked?
The Democratic bloc, which includes Sens. Ruben Gallego (Ariz.), Mark Warner (Va.), Lisa Blunt Rochester (Del.), and Andy Kim (N.J.) — all of whom previously voted in favor of the bill when it passed the Senate Banking Committee in March — now say the legislation still “has numerous issues that must be addressed.”
The letter, also signed by Sens. Raphael Warnock (Ga.), Catherine Cortez Masto (Nev.), Ben RAY Luján (N.M.), John Hickenlooper (Colo.), and Adam Schiff (Calif.), emphasized a continued willingness to negotiate. “We are eager to continue working with our colleagues to address these issues,” the senators wrote. “As stablecoins continue to grow in popularity, it is critical for Congress to work in a bipartisan fashion to create a regulatory framework that sets forth clear rules of the road.”
Notably absent from the statement were the bill’s two Democratic co-sponsors: Sen. Kirsten Gillibrand (N.Y.) and Sen. Angela Alsobrooks (Md.).
GOPeeved
The bill’s lead sponsor, Sen. Bill Hagerty (R-Tenn.), responded to the pushback with a warning and a challenge.
“We have a choice here. Move forward and make any remaining changes needed in a bipartisan way, or show that digital asset and crypto legislation remains a solely Republican issue,” he said, stressing the need to solidify U.S. dominance in the digital asset space.
The defection adds a new layer of complexity to an already contentious process, especially as the Trump family’s growing involvement in the digital asset space — including plans for a new stablecoin venture — has injected fresh political sensitivities into the debate.
With the bill now hanging in the balance, Democrats may hold the leverage to reshape key provisions — or stall one of the crypto industry’s most significant regulatory breakthroughs to date.
