Stablecoin Regulation Stalls in Senate: The GENIUS Act Fails to Advance
American legislation stalls as congressional lawmakers demonstrate inaction - 'Global spectators observe as U.S. policy-makers idle away'
The long-awaited push for stablecoin regulation in the U.S. has hit a snag, as the Senate couldn't muster the necessary votes to advance the GENIUS Act. The bill, which faced a 60-vote threshold, barely missed the mark with a 48-49 split, and three senators chose to abstain.
The setback comes after Democratic backers walked away from the legislation over the weekend, leaving the bill's fate uncertain.
In response, Treasury Secretary Bessent expressed his disappointment, urging lawmakers to seize the opportunity to lead, saying, "The world is watching as American legislators hesitate, while digital asset innovation moves elsewhere."
Controversial and Divisive Bill
The GENIUS Act's journey through the Senate has been marked by heated debates between Democrats and Republicans. Senators Elizabeth Warren and Jeff Merkley have been vocal critics of the bill, labeling it a backdoor for Trump's 'dubious crypto empire.'
Warren's opposition stemmed from her belief that the legislation could afford Trump's USD1 stablecoin an unfair advantage, potentially leading to illicit profits. Her concerns escalated after the announcement of a $2 billion deal between Trump-linked World Liberty Financial (WLFI) and Binance, backed by capital from an Abu Dhabi conglomerate.
Former Global Head of Policy and Government Relations at Kraken, Jonathan Jachym, shared similar sentiments, stating, "The U.S. is falling behind as other major economies implement clear regulations for stablecoins."
He went on to emphasize the urgency for lawmakers to come together and tackle stablecoin regulation by August.
Starting as a seemingly bipartisan initiative, the Senate Banking Committee passed the bill with an 18-6 vote. However, the bill's controversial nature has since made it a lightning rod for controversy.
In recent days, the USD1 stablecoin exploded past a $1 billion market cap, with a significant portion minted within an hour. This rapid growth has fueled further speculation about the intersection of political power and private crypto ventures.
What's Next?
The failed Senate vote has left the future of stablecoin regulation uncertain. Senator Bernie Sanders warned that if the GENIUS Act were to pass, it would jeopardize consumer protections, aid criminal activities, and provide the Trump family with a lucrative opportunity to profit from crypto ventures.
As the crypto market surges past the $3 trillion mark and Trump hints at potentially game-changing trade deals, the pressure on lawmakers to address stablecoin regulation remains strong. Whether they can rise to the challenge and find a way forward remains to be seen.
- The failed advancement of the GENIUS Act in the Senate has ignited concerns within the crypto market, as lawmakers' inaction towards stablecoin regulation could lead to increased risks and opportunities for illicit activities.
- The controversial nature of the GENIUS Act, with vocal critics like Senators Elizabeth Warren and Jeff Merkley, has made it a divisive issue in the realm of policy-and-legislation, particularly in relation to crypto and politics.
- As the crypto market continues to grow exponentially, reaching over $3 trillion, the general-news surrounding the failed Senate vote on the GENIUS Act is shedding light on the urgent need for a clear policy on stablecoins to ensure consumer protection and prevent unethical exploits.
