- Senate Democrats are determined to oppose the GENIUS Act in its current state.
- The lack of agreement could complicate the journey of the stablecoin bill.
The U.S. Senate stablecoin bill’s fate hangs in the balance ahead of Thursday’s crucial vote.
Senators Elizabeth Warren and Reuben Gallego, leading the Democrats, have made it clear that they will not back the GENIUS Act unless stricter anti-money laundering measures and other safety precautions are included.
Warren openly criticized the bill on May 5th, citing a controversial $2 billion crypto deal between Trump-backed World Liberty Financials (WLFI) and Binance as an example of potential corruption facilitated by the bill.
“The Trump family stablecoin became the 7th largest in the world due to a questionable crypto deal with the UAE. The Senate must not pass a crypto bill that could enable this kind of corruption.”
According to reports, the deal involved the UAE acquiring a minority stake in Binance, with payment made using WLFI’s stablecoin (USD1).
Republicans Take a Firm Stance on the Stablecoin Bill
Initially, both Democrats and Republicans supported the GENIUS Act during its introduction. However, nine Senate Democrats, led by Arizona Senator Reuben Gallego, have withdrawn their support. Their letter highlighted the need for stronger anti-money laundering provisions, foreign issuer regulations, national security considerations, and maintaining financial system integrity.
“The current version of the bill has numerous unresolved issues that must be addressed. While we are willing to collaborate on improving it, we cannot support the current form of the bill.”
The passage of the bill was expected to be a significant milestone for the crypto industry, particularly for the rapidly growing stablecoin sector.
Following approval, Republican Senator Bill Hagerty, the bill’s main proponent, urged his peers to back the legislation, emphasizing the importance of bipartisan efforts to enact necessary changes.
“We must pass a law that solidifies American leadership in the digital asset realm and safeguards the US dollar for generations to come. The time for action is now.”
The crypto community criticized the Democrat-led opposition, alleging influence from the banking sector feeling threatened by stablecoin adoption.
Justin Slaughter from Paradigm and Stuart Alderoty from Ripple expressed similar sentiments, calling out the Democrats’ stance on stablecoins.
Dollar-pegged stablecoins like Tether’s USDT and Circle’s USDC have witnessed significant growth. The passage of the bill would bolster consumer protection and strengthen U.S. leadership in financial innovation.