The GENIUS Stablecoin Act failed to pass a key procedural vote in the U.S. Senate. The vote, known as a cloture vote, aimed to end debate and advance the bill toward a full vote but fell short of the required 60 votes, with a tally of 49 in favor and 48 against.
Several pro-crypto Democrats, including Ruben Gallego, Mark Warner, Lisa Blunt Rochester, Andy Kim, Kirsten Gillibrand, and Angela Alsobrooks, voted against cloture, citing concerns over the bill’s latest draft, particularly around anti-money laundering provisions, national security, and perceived conflicts of interest tied to President Donald Trump’s crypto ventures, such as the $USD1 stablecoin linked to World Liberty Financial.
Republican Senators Josh Hawley and Rand Paul also voted against it, with Senate Majority Leader John Thune switching his vote to “no” to allow revisiting the legislation later. The failure has raised doubts about the bill’s immediate future and could impact other crypto-related legislation, as bipartisan support has weakened. Democrats have expressed concerns about the bill’s lack of safeguards against corruption and its potential to benefit Trump’s financial interests, while some Republicans criticized Democrats for playing partisan politics.
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Negotiations continue, with hopes of revising the bill for another vote, possibly as early as the following week, but the setback has dimmed prospects for swift passage. The failure to pass the procedural vote delays comprehensive U.S. stablecoin regulation, leaving the crypto industry in a state of uncertainty. Stablecoins, critical for crypto trading and DeFi, lack clear federal oversight, potentially stifling innovation and investor confidence.
The setback could dampen crypto market sentiment, particularly for stablecoin-related projects. Uncertainty may lead to reduced investment in U.S.-based crypto ventures, as firms may look to jurisdictions with clearer regulations, like the EU or Singapore. The vote highlights growing political tensions over crypto policy. The failure may embolden critics of crypto-friendly legislation, while pro-crypto lawmakers face pressure to address concerns about transparency, anti-money laundering (AML), and conflicts of interest.
Allegations of the bill favoring Trump-affiliated projects, like $USD1 tied to World Liberty Financial, have intensified scrutiny. This could lead to stricter oversight of political figures’ involvement in crypto or demands for divestment from such ventures. The bipartisan divide may complicate other crypto bills, such as those addressing DeFi or crypto taxation. Lawmakers must now renegotiate to bridge gaps, but trust issues and partisan posturing could hinder progress.
Senators like Mark Warner and Kirsten Gillibrand expressed unease over weak AML provisions, fearing stablecoins could facilitate illicit finance or evade sanctions. Democrats, including Ruben Gallego and Angela Alsobrooks, criticized the bill for potentially benefiting Trump’s crypto ventures, pointing to $USD1 and World Liberty Financial. They argue the bill lacks safeguards against conflicts of interest. Some Democrats pushed for stronger measures to protect retail investors from stablecoin volatility or issuer insolvency, citing past failures like TerraUSD.
Most Republicans, led by figures like Senate Banking Committee Chair Tim Scott, supported the bill, arguing it fosters innovation and positions the U.S. as a crypto leader. They view stablecoin regulation as a step toward mainstream adoption. Republicans accused Democrats of politicizing the vote, claiming their opposition stems from anti-Trump sentiment rather than substantive policy issues. They argue delays harm U.S. competitiveness. Senators Josh Hawley and Rand Paul broke ranks, with Hawley skeptical of crypto’s broader societal value and Paul citing libertarian concerns over regulatory overreach.
The vote revealed a fractured coalition. While some Democrats like Cory Booker initially backed crypto-friendly policies, the latest draft’s perceived flaws and Trump ties eroded support. Republicans, meanwhile, struggled to unify their caucus, with procedural tactics (e.g., Thune’s vote switch) signaling internal doubts about immediate passage. The divide reflects broader ideological splits: Democrats prioritize regulation and equity, while Republicans emphasize innovation and deregulation. Reconciling these views will require compromise on AML rules, conflict-of-interest provisions, and consumer safeguards.
Negotiations are underway to revise the bill, with potential amendments to strengthen AML measures and address conflict-of-interest concerns. A new vote could occur soon, but the divide suggests passage remains uncertain without significant concessions. The outcome will shape U.S. crypto policy and influence global regulatory trends.