Washington — The Senate is moving toward final passage on a landmark piece of legislation to regulate crypto after a bumpy path through the upper chamber.
The bill, known as the GENIUS Act, would establish a regulatory framework for the $250 billion market for stablecoins, a type of cryptocurrency tied to the value of an asset like the U.S. dollar.
It advanced out of the Senate Banking Committee in March with bipartisan backing, but bled Democratic support weeks later when it was revealed that an Abu Dhabi-backed firm would use $2 billion in stablecoin purchased from Trump family-linked crypto firm, World Liberty Financial, to invest in Binance.
Concerns about President Trump and his family’s business ventures involving cryptocurrency raised the sense of urgency for Democrats, who pushed for stronger provisions to safeguard against corruption while protecting consumers, the financial system and national security.
In early May, Democrats prevented the legislation from advancing, leading to weeks of bipartisan negotiations that resulted in changes that convinced enough Democrats to come back on board and help propel it through several procedural votes.
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The changes include requiring members of Congress and Executive Branch officials to disclose stablecoin holdings over $5,000, stronger bankruptcy protections for bank depositors and directing the Treasury to issue formal rules for monitoring suspicious transactions.
Still, some Democrats say their concerns have not been addressed, and they’ve complained that they will not have the ability to amend the bill. Although Senate Majority Leader John Thune, a South Dakota Republican, initially planned to allow an open amendment process, he reconsidered after at least one amendment from Republican Sen. Roger Marshall of Kansas on credit card transaction fees threatened to sink the bill if adopted.
Sen. Elizabeth Warren of Massachusetts, the top Democrat on the Senate Banking Committee, was among the bill’s top detractors. She helped rally Democrats to sink the bill in the initial vote, arguing that “this weak bill is worse than no bill at all.” Before the bill advanced in another procedural vote last week, Warren unsuccessfully called on her colleagues to “show a little spine and insist on amendments as the price for helping advance this bill.”
More than 100 amendments were offered from Democrats and Republicans on issues ranging from barring the president, vice president and other top government officials from profiting from stablecoin ventures while in office to prohibiting large online platforms from issuing the digital assets.
Two Republicans have also consistently voted against the legislation — Republican Sens. Rand Paul of Kentucky and Josh Hawley of Missouri — albeit for different reasons. Paul doesn’t see a need for federal regulation of the industry, while Hawley has warned that it cedes too much power to tech giants.
Democratic Sen. Kirstin Gillibrand of New York, who worked on the bill, defended the framework as long overdue.
“To date, Congress’ failure to act has left the digital asset space as a wild West, where American consumers are vulnerable to scams and businesses are desperate for the regulatory clarity they need to compete with foreign countries, foreign entities that do business in our markets, effectively. Doing nothing and protecting the status quo is not only irresponsible, it’s unacceptable,” she said on the Senate floor last week.
Gillibrand acknowledged that Mr. Trump’s involvement in the crypto sphere is “extremely unhelpful” but argued it “does not diminish the excellent work in this legislation.”
