- GENIUS Act fell short with a 48–49 vote; 60 votes were needed.
- The Act initially faced fierce political divide over Trump-linked stablecoin interests.
A major push to regulate stablecoins in the U.S. hit a wall this week, as the Senate failed to advance the much-anticipated GENIUS Act.
Despite weeks of negotiations and mounting political pressure, the bill fell short of the 60 votes required, with a narrow 48-49 split and three senators abstaining.
The collapse came after key Democratic backers unexpectedly withdrew their support over the weekend, throwing the legislation into uncertainty.
Reacting to the outcome, Treasury Secretary Scott Bessent said,
“The world is watching while American lawmakers twiddle their thumbs. Senators who voted to stonewall U.S. ingenuity today face a simple choice: Either step up and lead or watch digital asset innovation move offshore.”
This followed the debate over stablecoin regulation in the U.S. which had reached a boiling point just a day ago.
Republicans vs. Democrats
Senators Elizabeth Warren and Jeff Merkley have vehemently opposed the bill, calling it a gateway to Trump’s ‘corrupt crypto empire’.
Warren, in particular, alleged a conflict of interest between the legislation and Trump’s USD1 stablecoin. She accused the former president of manipulating public policy to gain illicit profits.
Her concerns escalated after the announcement of a $2 billion deal between Trump-aligned World Liberty Financial (WLFI) and Binance. The deal is backed by capital from an Abu Dhabi-based conglomerate.
Adding to the sentiment, Kraken Global Head of Policy and Government Relations Jonathan Jachym said in a statement,
“Other major economies around the world are years ahead in putting clear rules in place for stablecoins and centralized intermediaries.”
He added,
“After many years of legislative progress, it is critical that U.S. lawmakers come together in the coming months to finalize stablecoin and market structure bills by August.”
Hence, what began as a seemingly bipartisan initiative through the Senate Banking Committee, passing with an 18-6 vote, has now become a lightning rod for controversy.
This coincided with USD1 recently exploding past a $1 billion market cap, much of it minted within a single hour, raising further questions about the intertwining of political power and private crypto ventures.
Echoing similar sentiments, Senator Bernie Sanders cautioned,
“The GENIUS Act would undermine consumer protections, benefit criminal actors, and allow the Trump family to make tens of millions of dollars through crypto ventures.”
