Senator Tim Scott Warns Democrats of Political Consequences After GENIUS Act Fails in Senate
Senator Tim Scott issued a warning on Thursday night to Democrats who voted against the GENIUS Act, stating that they should expect “painful” political consequences. The statement came after the crypto bill failed in the US Senate, with Democrats blocking it despite months of bipartisan talks.
The GENIUS Act, spearheaded by Senator Bill Hagerty, aimed to establish the first legal framework for stablecoins in the US. However, two Democratic co-sponsors changed their votes, and two Republicans – Josh Hawley and Rand Paul – also voted against the bill.
Eleanor Terrett, former Fox Business journalist and founder of Crypto in America, revealed that Scott expressed hope that the reaction from the crypto industry would prompt lawmakers to reconsider and pass the bill.
As the chair of the Senate Banking Committee, Scott highlighted that his party had made significant concessions to advance the bill. These concessions included reducing the registration time for stablecoin issuers in the US, strengthening national security regulations, and easing anti-money laundering measures.
Despite these efforts, Senators Kirsten Gillibrand and Angela Alsobrooks, who played a role in crafting the bill, withdrew their support. Scott expressed his disappointment, stating, “If you can achieve so much of what you desire and still can’t say yes, I fail to comprehend.” He expressed hope that both Democrats and the two opposing Republicans would reconsider their stance after recognizing the negative impact of the delay on financial inclusion and stifling crypto innovation.
Democrats’ Obstruction as Trump’s Crypto Ties Dominate Discussions
The setback of the bill occurred in a Senate where the crypto industry had previously experienced favorable conditions during President Donald Trump’s second term. This defeat marked the first significant setback for the industry in the Trump era. Republican leaders required Democratic support to pass the bill, which they did not receive.
Senator Chuck Schumer, the Democratic leader, had cautioned his caucus a week before the vote not to commit to backing the bill. Behind closed doors, he urged them to leverage their positions to demand further modifications. Lawmakers like Senator Elizabeth Warren and Chris Murphy expressed reservations about passing any crypto legislation while the Trump family maintained deep involvement in the sector.
Trump’s sons initiated a stablecoin venture the previous year, with Trump himself launching a memecoin just two days before reassuming office. Murphy labeled the “Trump crypto coin scam” as the most significant corruption in White House history. He and others insisted on including language in the bill to prevent any president from creating or profiting from crypto assets.
However, not all lawmakers shared this view. Senator Ruben Gallego, who had previously supported an earlier version of the bill and led last-minute negotiations, argued that Trump’s coin had no bearing on the actual bill.
“If we do not pass any stablecoin legislation, he will continue to do what he is doing now. The critical aspect is to enact a robust bill.”
Following the bill’s defeat, Scott denounced the Democrats on the Senate floor, stating, “It was a vote to prevent President Trump from achieving success in the digital asset realm. It was a vote against common sense – plain and simple.” He accused Democrats of allowing “Trump Derangement Syndrome” to overshadow what could have been a bipartisan victory for the crypto industry.
The Democrats argued that they required more time to finalize the deal. Gallego requested a delay in the Senate floor vote, but Republicans rejected the proposal. Senate Majority Leader John Thune has since filed a motion to reconsider, potentially reviving the bill.
Senator Warren expressed concerns about the influence of money in Washington, particularly highlighting the power that the crypto industry wields due to their contributions. After the vote, Scott’s team advised against crypto donors supporting Democrats, with Jennifer DeCasper, Scott’s aide and Executive Director of the National Republican Senatorial Committee, stating, “Backing Senate Democrats in the hope of crypto progress is overlooking reality.”
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