Democrats Under Fire for Partisan Approach during Stablecoins Bill Collapse by US Senators
Here's the Rewritten Article:
Senate Derails Stablecoins Legislation, GOP Slams Democrats for Partisan Politics
In a disappointing blow to the US crypto industry, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act has hit a dead-end in the US Senate after failing to garner enough support from Senators.
On Thursday, the much-anticipated bill fell short of the 60 votes needed to move past the cloture vote, with only 49 senators voting in favor. This leaves the future of stablecoin regulation unclear.
The GENIUS Act, introduced by US Senator Bill Hagerty, aimed to create a framework for tokens like USDT and USDC to fall under the Federal Reserve's rules. Co-sponsored by Senators Tim Scott, Cynthia Lummis, Kirsten Gillibrand, and Angela Alsobrooks, the bill's purpose was to establish a "safe and pro-growth regulatory framework that will unleash innovation and advance the President's mission to make America the world capital of crypto."
Initially gaining support from both Democrats and Republicans, the bill underwent amendments to address concerns, including stricter requirements for stablecoin issuers and Anti-Money Laundering provisions. However, concerns over the bill's amendments led to objections from ten Senate Democrats, reportedly taking many lawmakers by surprise. The critics argued that the revised bill omitted essential AML and national security safeguards and contained ambiguous regulations that could expose crypto markets to exploitation.
Democratic Senator Elizabeth Warren further criticized the GENIUS Act, alleging that it could pave the way for "crypto corruption." Warren claimed that the Trump family could benefit from World Liberty Financial's USD1 stablecoin deal with MGX, a firm based in the United Arab Emirates. The deal, connected to Binance and worth $2 billion, should not be approved, she stated, as it could enable this type of corruption.
Following the bill's failure, Senator Tim Scott, one of the bill's co-sponsors, criticized Senate Democrats for "playing politics with bipartisan legislation." He argued that the GENIUS Act represented a historic opportunity for America's financial system to be democratized but that the Senate had instead witnessed a "disappointing display of political gamesmanship."
Senator Lummis also expressed her disappointment, stating that digital assets are the future, and America must lead the way. She emphasized that it was essential to continue moving digital asset legislation forward to preserve America's dollar dominance and make America the crypto capital of the world.
Treasury Secretary Scott Bessent added that the world needs American leadership for stablecoins and other digital assets to thrive. He expressed disappointment that the Senate had missed "an opportunity to provide that leadership" by passing the bill.
Without federal guidance, stablecoins will be subject to a patchwork of state regulations instead of a streamlined federal framework. This could hinder growth and competitiveness in the digital asset space, with the world watching as American lawmakers hesitate to act.
**Enrichment Data:
The current status of the GENIUS Act in the US Senate is that it has failed to pass, primarily due to internal Democratic divisions and objections to the bill's provisions. Initial Democratic support for the bill waned ahead of the scheduled Senate vote, with Senate Minority Leader Chuck Schumer encouraging caution to maintain leverage for amendments. Some Republican senators, including Sen. Cynthia Lummis, remained optimistic about bipartisan compromise, but defections on both sides ultimately hindered the bill's chances of passing. The failure to pass the GENIUS Act has been criticized by some Republican senators who argue that Senate Democrats prioritized partisan politics over policy progress.
- Senate Democrats, led by Minority Leader Chuck Schumer, cautioned against passing the GENIUS Act, hoping to maintain leverage for further negotiations on amendments.
- Republican senators, including Cynthia Lummis, expressed optimism for bipartisan compromise, but internal Democratic divisions and objections to the bill's provisions led to its failure.
- The failure of the GENIUS Act to pass has been criticized by some Republican senators, who argue that Senate Democrats prioritized partisan politics over policy progress.
- Without the passage of the GENIUS Act, stablecoin regulations remain unclear, potentially hindering growth and competitiveness in the digital asset space.
- Treasury Secretary Janet Yellen called for American leadership in the stablecoin and digital asset sector, arguing that the world needs a streamlined federal framework to ensure stablecoin thriving, not a patchwork of state regulations.
