On Monday, the Senate made significant progress toward establishing a comprehensive regulatory framework for the cryptocurrency industry by advancing the GENIUS Act with a bipartisan vote of 66-32. This development comes just two weeks after Senate Democrats unified to block the bill, highlighting a swift shift in legislative dynamics. The GENIUS Act aims to regulate stablecoins, which are digital tokens tied to traditional fiat currencies, such as the U.S. dollar.
In a notable display of bipartisanship, 16 Democrats joined the majority of Senate Republicans to support the procedural vote necessary for the GENIUS Act to progress. However, it is important to note that two Republican senators, Rand Paul of Kentucky and Jerry Moran of Kansas, voted against the bill. To advance to final passage, the legislation required a minimum of 60 votes, a threshold it successfully crossed despite the Republican party holding a three-seat majority in the Senate.
The shift in Democratic support was largely facilitated by a group of bipartisan negotiators, including Senators Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), Mark Warner (D-Va.), Kirsten Gillibrand (D-N.Y.), Angela Alsobrooks (D-Md.), and Ruben Gallego (D-Ariz.). Late last week, this coalition reached an agreement on an amendment to the GENIUS Act that addressed several critical concerns raised by Democrats. Key changes include enhanced consumer protection measures, restrictions on technology companies issuing stablecoins, and the extension of ethics standards to special government employees—an amendment that temporarily impacts individuals like Elon Musk and tech entrepreneur David Sacks.
In exchange for their support on the amendment, Democratic negotiators indicated their commitment to back the GENIUS Act even if the amendment fails. While Senate Republicans have remained noncommittal regarding their support for the amendment, the newly proposed changes are expected to broaden Democratic backing beyond the core negotiators.
The GENIUS Act faced significant challenges just weeks prior, with Senate Democrats, alongside two Republican senators, blocking the legislation due to demands for stronger national security and anti-money laundering provisions. Senate Majority Leader John Thune (R-S.D.) expressed frustration over the delay, pointing out that no substantial changes had been made to the bill since its previous blockage. “It’s really hard to understand why we needed to wait an additional 11 days for Democrats to finally agree to move,” Thune remarked.
The Trump family's involvement in cryptocurrency, such as dealings with World Liberty Financial and a dinner hosted by former President Donald Trump for major holders of his meme coin, has exacerbated concerns among Democrats. Unlike stablecoins, which have inherent value linked to fiat currencies, meme coins typically derive their worth from internet culture. Despite these issues, the negotiated amendment does not prevent Trump and his family from continuing their crypto ventures.
The GENIUS Act includes a provision that prohibits members of Congress and senior executive branch officials from issuing payment stablecoin products during their tenure in public service. However, some Democrats, including Senator Elizabeth Warren (D-Mass.), argue that the legislation lacks sufficient strength. “Basic flaws remain unaddressed,” Warren stated on the Senate floor, asserting that Congress should not enable potential corruption by the president.
In response to concerns surrounding the Trump family's cryptocurrency activities, several Senate Democrats have introduced bills aimed at curbing these practices. Senator Michael Bennet (D-Colo.) plans to propose the STABLE Act, which would prevent elected officials and federal candidates from issuing or endorsing digital assets as an amendment to the GENIUS Act. Although votes on these bills are anticipated this week, their success in the GOP-controlled chamber remains uncertain.
Senate Minority Leader Chuck Schumer (D-N.Y.) convened a caucus-wide call to discuss the GENIUS Act, during which concerns about the bill's provisions were voiced. While some senators advocate for stronger regulations to limit Trump’s potential profits from digital assets, others, like Senator Warner, emphasize the necessity for Congress to actively engage in shaping the future of the cryptocurrency landscape. Warner stated, “If American lawmakers don’t shape it, others will — and not in ways that serve our interests or democratic values.”
Should the Senate successfully pass the GENIUS Act, its future in the House remains uncertain, as a different bill to regulate stablecoin issuers is currently under consideration. Advocates for cryptocurrency assert that Congress should also establish clear regulations regarding the treatment of digital assets and digital asset securities. “The winners, if Congress passes this bill, are Americans who want to make payments faster and easier to access,” said Kara Calvert, Vice President for Public Policy at Coinbase, a leading cryptocurrency exchange. “It’s transformational technology, so passing this bill is a win for them. It’s not just a win for the industry or a political candidate.”
