- Senate vote fails to advance GENIUS Act, missing 60 votes needed.
- Democrats raise concerns over consumer protections and security risks.
- Trump’s crypto ventures fuel partisan tensions in the stablecoin regulation debate.
The U.S. Senate rejected the move to advance the GENIUS Act, a bill that would regulate the stablecoin market. The bill, which intended to establish a framework for the $246 billion industry, failed to acquire the 60-vote threshold to move forward after senators voted 48-49. This is a major blow to crypto regulation efforts amid increased partisan sentiments, especially concerns over President Donald Trump’s ties in the sector.
Democratic senators have expressed concerns about the lack of sufficient consumer and national security protections in the bill. Some Democratic members, such as Senators Ruben Gallego and Mark Warner, stated that the bill did not address questions about strict rules for foreign stablecoin issuers and anti-money laundering measures. They stressed the need for further amendments to the legislation in order for them to support it.
Trump’s Crypto Ties Clouds Stablecoin Regulation
The vote was cast after weeks of partisan tensions in the Senate. The Republicans had pushed for the quick passage of the bill and emphasized the need for clear regulations in the stablecoin market. Senate Majority Leader John Thune dismissed the Democrats’ position and explained that several amendments were made to include their views.
One of the main disputes was the participation of President Trump and his business in the cryptocurrency market. Democrats stated that Trump’s ventures, such as the $TRUMP memecoin and his family’s World Liberty Financial, are possible conflicts of interest. These concerns are part of the reasons some senators were reluctant to support the current bill.
GENIUS Act Calls For Stablecoin Regulation
The GENIUS Act intended to institute severe reserve requirements on stablecoin issuers. The bill compelled issuers to back their reserves 100% in U.S. dollars or other liquid assets. It further proposed annual audits for stablecoins worth more than $50 billion in market capitalization. Moreover, the bill prohibited foreign stablecoin issuers from directly launching products in the U.S., while foreign-issued coins could still trade in the secondary market.
In April, the House Financial Services Committee pushed another similar but separate legislation. Although both the bills seek to establish stablecoin regulations, there’s a difference in their approach to foreign issuers as well as the state and federal level stablecoin regulations. The House version provides broader anti-money laundering provisions and stricter reserve ratios.
However, supporters of the GENIUS Act continue to push for consumer protection and clarity in the crypto market. However, with the division between lawmakers, the outcome of the stablecoin legislation remains uncertain.
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