Senate Democrats Hold Back on Stablecoin Legislation Due to Trump’s Crypto Ties
Senate Democrats are facing a roadblock in advancing significant stablecoin legislation, citing concerns over President Donald Trump’s increasing personal benefits from his own cryptocurrency connections. The current version of the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 (GENIUS Act) is being contested by Democrats, who have warned that they will not vote to move forward with the bill.
The issue at hand not only affects the stablecoin bill but also has implications for forthcoming market structure legislation. While the stablecoin bill is expected to eventually pass through Congress, any delay in momentum could jeopardize progress on broader market structure legislation that aims to regulate the oversight of the industry by the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission.
Recent developments, such as Trump’s involvement with his memecoin and Abu Dhabi investment firm MGX’s use of the Trump family-backed World Liberty Financial’s stablecoin for an investment in Binance, have raised concerns among Democrats. There are suggestions that Trump could personally benefit from these ventures, prompting Democrats to question the integrity of the legislation.
In response to these concerns, Sen. Ruben Gallego and eight of his colleagues have expressed reservations about advancing the stablecoin bill. They have highlighted the need for stronger provisions on anti-money laundering, foreign issuers, national security, and accountability to ensure the safety and soundness of the financial system.
Sen. Elizabeth Warren has been outspoken in her opposition to the bill, criticizing the potential for corruption and calling for a thorough investigation into the MGX deal. The stalling momentum in the Senate has also affected the House Financial Services Committee, where Rep. Maxine Waters has indicated her intention to block joint efforts with the House Agriculture Committee on market structure issues.
Despite the political challenges, financial-policy analyst Jaret Seiberg believes that the stablecoin bill will eventually pass the Senate, albeit with possible delays. Lobbyists for the crypto industry have urged lawmakers to proceed with the bill, emphasizing the importance of a regulatory framework to support stablecoin adoption and maintain dollar dominance in the digital economy.
The call for action has been echoed by industry associations, such as the Blockchain Association and the National Venture Capital Association, who emphasize the need for a clear and consistent regulatory framework to foster innovation and strengthen America’s leadership in financial technology. As the debate continues, the future of stablecoin legislation remains uncertain, with Democrats and Republicans at odds over the path forward.