Originally Seen as a Breakthrough in U.S. Stablecoin Regulation, the Cryptocurrency Bill “GENIUS Act” Blocked in Senate by 48 to 49 Votes
The “GENIUS Act,” which was originally viewed as a breakthrough in U.S. stablecoin regulation, was blocked in the Senate with a vote of 48 to 49, with some Republican senators also casting dissenting votes. The primary reason for this was the Democratic Party’s concerns regarding Trump’s involvement in the issuance of the “$TRUMP” meme coin, raising conflicts of interest. However, Brian Armstrong, CEO of the well-known exchange Coinbase, stated that the mere fact that the bill reached the voting stage is a positive development, representing a historic first step in the regulatory process.
What is the GENIUS Act? The First Step in Stablecoin Regulation
This bill was intended to establish the first regulatory framework for stablecoin issuers (such as USDC, USDT, etc.) in the United States, aimed at making the cryptocurrency market more compliant and transparent.
The bill had originally passed through the Senate Banking Committee and had the support of five Democratic senators, seemingly poised for approval. However, just as the formal vote was about to take place, there was a significant shift within the Democratic Party.
The Democratic Party’s Shift: Concerns Over Trump’s Policy Beneficiary
Internal pressures from Senate Minority Leader Chuck Schumer and Senator Elizabeth Warren led the Democratic Party to collectively pivot, urging party members to withdraw support. They argued for the inclusion of stricter anti-corruption measures, including a ban on Trump and his family owning or trading cryptocurrencies.
One key factor in this shift was the announcement by an Abu Dhabi-based investment firm to invest billions of dollars into Trump family’s cryptocurrency project “World Liberty Financial,” raising strong concerns among Democratic legislators about potential issues of “policy for cash” and “collusion between government and business.”
Failed Negotiations: Key Provisions Excluded
The Democrats demanded the addition of the following provisions:
- Prohibition on the President and family from issuing stablecoins
- Stricter anti-money laundering measures
- Prohibition on foreign interference in the issuance of crypto assets
- Expansion of constraints on meme coins and political figures’ cryptocurrency activities
Among these, the provision that aimed to prohibit officials from issuing stablecoins was removed during last-minute negotiations, leading to dissatisfaction among Democrats. Arizona Republican Senator Gallego attempted to delay the vote and negotiate more time, but was met with rejection from Warren.
Internal Dissent Among Republicans
Despite the Republicans holding a 53-seat advantage, several senators voted against the bill:
- Josh Hawley: Wished for the bill to prohibit tech companies (Google, Meta) from issuing stablecoins
- Rand Paul: Opposed overall regulation, believing that if the market is functioning well, there is no need for interference
Senate Republican leader Thune also cast a dissenting vote; although he supported the legislation, he strategically voted against it to facilitate the future reintroduction of the bill on the agenda (a technical maneuver in the Senate).
Coinbase CEO: The Bill Reaching the Voting Stage is a Positive Development
Brian Armstrong, CEO of Coinbase, also took to Twitter (X) after the vote, stating:
“Although this time ended in failure, seeing the Senate finally vote on the stablecoin bill is a good thing. This is just the beginning; it’s part of the process.”
Coinbase’s stance reflects the cryptocurrency industry’s expectations for regulatory legislation but also reveals dissatisfaction with provisions in the bill such as “prohibition of gains.”
External Pressures and Concerns
On the eve of the vote, AI crypto mogul David Sacks was invited by the Republicans to participate in a closed-door briefing discussing cryptocurrency regulation and venture capital perspectives. However, many senators admitted that even they were unclear about how the cryptocurrency world operates:
“There is currently no regulation; it feels like the Wild West.” – Ohio Republican Senator Husted
“Bitcoin trading is completely different from stablecoins; everyone really needs to understand the differences.” – Florida Senator Rick Scott
The Bill Has Not Succeeded; Continued Efforts Needed
The failure of the “GENIUS Act” vote is not merely a legislative impasse; it has also unveiled the political prelude to the cryptocurrency regulation battle. Trump’s prior endorsement of his meme coin TRUMP, along with the announcement of a multi-billion dollar investment into Trump family’s cryptocurrency project WLF from an Abu Dhabi-based investment firm, has heightened the Democratic Party’s concerns over potential collusion between politics and business.
As the cryptocurrency market matures and increasingly influences political and electoral interests, the future battles over legislative offense and defense, ethical standards, and presidential financial disclosures are likely to intensify.
Risk Warning
Investing in cryptocurrencies carries a high level of risk, and prices may fluctuate significantly, potentially resulting in the loss of all principal. Please assess risks carefully.