CNN
—
Senate Democrats blocked a first-of-its-kind bill aimed at regulating cryptocurrency in the US amid Democratic concerns over President Donald Trump’s cryptocurrency dealings.
The vote came after months of intense negotiations between Democrats and Republicans.
The final tally was 49-48, with GOP Sens. Rand Paul and Josh Hawley joining Democrats to vote against advancing the bill.
The bill, dubbed the GENIUS Act, focused on what is known as “stablecoin,” a digital currency tied to the value of a specific asset — in this case the US dollar. The push for the bill represented a rare bipartisan effort in the Senate for major legislation. But while there is general agreement across the Senate that regulation is necessary, key Democrats ultimately balked at moving ahead after demanding changes to the legislation.
After it became clear that Senate Republicans planned to put the bill on the floor this week, nine Senate Democrats who had been open to backing the bill penned a letter last Saturday saying they needed further changes to the legislation, beyond addressing concerns over Trump’s crypto dealings, before they could vote to advance it.
“The bill as it currently stands still has numerous issues that must be addressed, including adding stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system, and accountability for those who don’t meet the act’s requirements,” they wrote.
Earlier Thursday, Senate Majority Leader John Thune pushed for enough Democrats to vote for the bill so that they could reach the 60-vote threshold needed to advance it, insisting negotiations could continue on the details of the legislation after clearing the hurdle.
“If senators would like the opportunity to make further modifications to the bill, I encourage them to vote for cloture. Once we’re on the bill, we can discuss changes here on the floor,” he said. “We’ve had an open process on this bill so far, so why stop now?”
Democratic Sen. Elizabeth Warren has led the charge against the bill, arguing that the GENIUS Act will “supercharge Donald Trump’s corruption,” and that it does not have the necessary guardrails to protect consumers. Warren added that this kind of regulation is necessary, but that the bill was not adequate.
“The only version of this bill that we have seen is one that the Republicans put out, and it has four major areas that are problems. The first one is it would supercharge Donald Trump’s corruption. The second is that it puts national security at risk,” she argued.
“The third is that it undercuts consumer protection and consumer protection laws, and the fourth is it runs a substantial risk of eventually blowing up the US economy and putting us once more in a position where taxpayers have to bail out the billionaires while they end up paying for the risks that the rich people took on.”
She emphasized that Democrats don’t want to “get rolled” on this issue, trusting that Republicans will take their concerns into account before calling for a vote on final passage.
In addition, some Democrats who had previously backed the bill sought to demonstrate their opposition to the president’s crypto dealings by sponsoring the End Crypto Corruption Act, which would block the president, vice president, members of Congress, senior executive officials and their families from endorsing or issuing cryptocurrencies.
While there are plenty of bipartisan bills introduced in a Congress this closely divided, it’s rare to see a major piece of regulatory legislation authored by senators from both sides of the aisle gain traction. It was co-sponsored by Gillibrand and Alsobrooks, led on the Republican side by Sens. Bill Hagerty and Cynthia Lummis, and it advanced out of the Senate Banking Committee in March by a vote of 18-6, with five Democrats supporting it.
Members kept negotiating this week, holding two member-level meetings on Wednesday and continuing to speak as the hours ticked down towards the scheduled vote to advance the bill Thursday afternoon. Sen. Ben Ray Lujan, who had signed on to the letter from Democrats on Saturday, told CNN on Wednesday that there was still room to get to a deal, but they needed more space to do so.
“There has to be some certainty to everyone involved, including the leader, scheduling votes, things of that nature. Or it could be a vote that maybe could move into early next week to give the staff the necessary time to be able to put everything on paper as well.”
Democratic Sen. Mark Warner, one of the lead negotiators, said in a statement, “While we’ve made meaningful progress on the GENIUS Act, the work is not yet complete, and I simply cannot in good conscience ask my colleagues to vote for this legislation when the text isn’t yet finished.” Another negotiator, Democratic Sen. Ruben Gallego, formally requested that they push the vote to Monday to allow more time to finish and review new bill text, but Republicans objected.
Some Democratic senators argued that Trump’s cryptocurrency dealings only increase the urgency for regulatory legislation — and the need to get it right.
“I think it makes it — it raises the stakes that before we do something, we got to make sure it’s really good. And it certainly shouldn’t be something where you know he’s exempted from a regulatory environment,” said Sen. Tim Kaine.
Senate Republicans were largely united in their support for the legislation, and even received a visit from David Sacks, the White House’s czar on AI and cryptocurrency, on Wednesday to educate senators on stablecoin.
