Democratic Party Intends to Prevent Senate Approval of Crypto Bill Due to Critical Reservations
A surprising turn of events has arisen, potentially halting one of the most significant digital asset bills in recent times. On May 3, 2025, a group of nine Senate Democrats, including 6 members of the Senate Banking Committee, announced their opposition to the ongoing Republican-led stablecoin bill, known as the GENIUS Act. This opposition could significantly impact U.S. crypto regulations.
👀 Just in: 9 Senate Democrats, including prominent members like Sen. Ruben Gallego and Sen. Mark Warner, have signaled their disapproval of the GENIUS Act. 👇Tweet
Led by Sen. Hagerty, the GENIUS Act seeks to establish the first-ever regulatory framework for stablecoins, digital currencies tied to traditional currencies like the U.S. dollar. Although the bill sailed through the Senate Banking Committee with bipartisan backing in March, recent statements from Democrats indicate that their earlier support has crumbled.
Steamrolling Democratic Support
Sen. Gallego and 8 other Democratic senators voiced their concerns, with 4 of them initially supporting the bill during its early stages. The co-signatories agreed that they would not be able to vote for cloture without significant revisions. This consensus could potentially derail the legislation, as it requires 60 votes in the Senate to overcome a strategic delay. With Republican margins slim and Democratic hesitation mounting, reaching the necessary threshold has become increasingly challenging.
Key Concerns and Pushback
The senators highlighted several issues, including the need for more robust safeguards. Their concerns encompassed:
- Inadequate anti-money laundering provisions
- Lack of strong oversight over foreign stablecoin issuers
- Absence of strict enforcement
- National security concerns
- Accountability among stablecoin operators
They stressed the importance of stronger protections, cautioning against legislation that leaves the financial system vulnerable. Despite their criticisms, the legislators expressed a willingness to compromise, vowing to work collaboratively to address the underlying deficiencies.
The Trump Factor
Recent months have seen an increased level of tension surrounding digital assets, with a member of the Trump family playing a crucial role in the crypto industry. The emergence of a new stablecoin venture backed by the former president's son has sparked apprehensions among Democrats, who fear potential conflicts of interest and political bias.
While the Republican lawmakers hoped that a recent amendment would address the Democrats' concerns, smooth the path for bipartisan approval, and address the outlined shortcomings, the latest opposition suggests they may need to go further. Instead, the Democrats seem poised to leverage their position to demand additional concessions.
Shifts and Responses
Interestingly, two of the Democratic senators co-sponsoring the bill, Sen. Kirsten Gillibrand and Sen. Angela Alsobrooks, did not sign the opposition statement. Their ongoing support could provide a potential roadmap for a future compromise, should a revised version of the bill emerge.
In response, Sen. Hagerty defended the bill, stating, "We must advance legislation that enshrines American leadership in the digital asset space and protects the US dollar for centuries to come." The next procedural vote on the bill is expected as early as next week, and whether Democrats and Republicans can strike a new agreement may determine the immediate future of the GENIUS Act and U.S. crypto regulation.
🚨 Context Check: The GENIUS Act, or S.394, made its way through the Senate Banking Committee with an 18-6 bipartisan vote in March 2025, indicating partial Democratic support. Despite this progress, increasing opposition to the bill's current form could slow or alter its passage.
🔎 Further Reading:
- Coinbase CEO calls for permanent solution to provide regulatory clarity for crypto
- Stablecoin regulation faces latest US Senate hurdle
- US crypto regulator warns of bankruptcy risk for stablecoin reserves
- The GENIUS Act, a bill aiming to establish regulations for stablecoins, faces mounting opposition from Democratic lawmakers, including nine Senate Democrats and members of the Senate Banking Committee like Sen. Ruben Gallego and Sen. Mark Warner.
- Led by Sen. Hagerty, the GENIUS Act, initially backed by both parties, is facing a potential derailment in the Senate as Democrats demand significant revisions due to concerns about insufficient anti-money laundering provisions, lack of foreign stablecoin issuer oversight, absence of strict enforcement, national security concerns, and accountability among stablecoin operators.
- These senators stress the need for stronger protections, aiming to avoid legislation that leaves the financial system vulnerable, despite expressing a willingness to collaborate for a compromise.
- The increasing tension surrounding digital assets is fueled by a new stablecoin venture backed by a member of the Trump family, which has raised apprehensions among Democrats about potential conflicts of interest and political bias.
- Although a recent amendment was intended to address Democratic concerns and secure bipartisan approval, the latest opposition suggests further concessions may be necessary.
- The next procedural vote on the bill is expected as early as next week, with the immediate future of the GENIUS Act and U.S. crypto regulation potentially hinging on the ability of Democrats and Republicans to strike a new agreement.
