Even Dems Who Initially Backed Crypto GENIUS Act Block It Over 'Outstanding Issues'

In a win for progressive groups and lawmakers who have been sounding the alarm about legislation that would create a regulatory framework for stablecoins, the U.S. Senate Democratic Caucus—along with a couple of Republicans—blocked the cryptocurrency bill from advancing on Thursday in a 49-48 procedural vote.

A stablecoin is a digital asset whose value is tied to traditional currency, such as the U.S. dollar, or a commodity like gold. Sen. Kirsten Gillibrand (D-N.Y.) co-sponsored the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which advanced out of the Senate Banking Committee in March with support from five other Democrats.

Meanwhile, the committee's ranking member, Sen. Elizabeth Warren (D-Mass.), has blasted the bill—as has Sen. Bernie Sanders (I-Vt.), who caucuses with Democrats and warned this week that the GENIUS Act would make it easier for President Donald Trump "and his family to continue to engage in corrupt dealmaking enabled through their cryptocurrency."

Our Revolution, a group formed as a continuation of Sanders' 2016 presidential campaign, has similarly panned the legislation, with executive director Joseph Geevarghese calling it a "laughably weak and toothless regulatory bill—a sham crafted by cryptocurrency giants that is certain to line the pockets of the Trump family's crypto empire."

Concern over the bill has grown since the revelation last week that a stablecoin developed by the Trump family crypto firm, World Liberty Financial, would be used for a $2 billion deal between an investment firm established by the government of Abu Dhabi, MGX, and the world's largest crypto exchange, Binance.

In recent days, several crypto-friendly Democrats said they couldn't support the GENIUS Act in its current form, and ultimately, no members of the party's caucus voted for it. Thursday's vote was welcomed by Our Revolution, which said on social media that "Democrats held firm against this corporate power grab. We're fighting for fairness, not billionaire greed!"

Gillibrand, a key target of Our Revolution ahead of the vote, said in a statement that "I believe it is essential to the future of the U.S. economy and to everyday Americans that we enact strict stablecoin regulations and consumer protections where none currently exist. Over the past few years, I have worked in good faith with Republicans to author robust stablecoin legislation that protects consumers, enables innovation to thrive, and maintains the dominance of the U.S. dollar."

"The bipartisanship of this effort was on display when the bill passed out of the Banking Committee with strong support from Democrats and Republicans," she continued. "However, developments over the past week made it clear that there were a number of outstanding issues that needed to be addressed before this bill could pass the full Senate."

"I fully support my colleagues' efforts," Gillibrand said, specifically applauding Sen. Bill Hagerty (R-Tenn.) "for his tireless work across the aisle to improve and strengthen this bill." She added that "I remain extremely confident and hopeful that very soon we can finish the job."

According to Axios: "Key Senate players have been meeting all week, trying to land a deal to appease Democrats. Senate Republicans reviewed Democrats' proposed changes to the GENIUS Act, with Majority Leader John Thune (R-S.D.) and Sen. Mark Warner (D-Va.) negotiating up until the last minute."

Warner, one of the Democrats who voted the bill out of committee in March, said in a Thursday statement that "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."

"I remain fully committed to getting this right," he said. "I plan to continue working with my colleagues to strengthen this legislation and move it forward in a way that promotes innovation while protecting the interests of the American people. It is my sincere hope that we can start floor consideration next week after we have finalized our work and given our colleagues adequate time to review."

While Thune reposted social media statements from his GOP colleagues expressing disappointment over the result and accusing Democrats of "hypocrisy," he also signaled that the effort to pass a stablecoin bill will continue by changing his vote from yes to no, which enables him to bring up the GENIUS Act at a later date.

Given expectations that the fight for the bill will go on, Democrats are still pushing for key reforms and additions. Citing recent reporting about Trump agreeing to attend a dinner with major investors in his cryptocurrency, Sen. Jeff Merkley (D-Ore.) said on social media Friday that "access to the White House shouldn't be up for sale to the highest bidder!!"

"This kind of blatant corruption takes a sledgehammer to public trust—we need to add my End Crypto Corruption Act to the GENIUS Act NOW!" added Merkley, pushing legislation that would ban the president, vice president, top executive branch officials, members of Congress, and their immediate families from issuing, endorsing, or sponsoring crypto assets.