Stablecoin Reform Stalls in Senate Amid Political Rift

Efforts to create a clear legal framework for U.S. stablecoins took a hit this week after the Senate failed to push forward a key piece of legislation.

The bill in question, dubbed the GENIUS Act, stalled on May 8 after it didn’t secure enough votes to proceed, highlighting ongoing divisions over digital asset policy in Washington.

Originally championed by Senator Bill Hagerty and supported by a bipartisan group of lawmakers including Tim Scott, Kirsten Gillibrand, Cynthia Lummis, and Angela Alsobrooks, the bill aimed to formalize rules for stablecoin issuers. The legislation was viewed by many as a strategic move to maintain U.S. dollar dominance in the evolving digital payments space, steering clear of more divisive crypto topics.

In a bid to win over skeptical Democrats, lawmakers introduced additional provisions targeting anti-money laundering compliance. However, concerns surrounding former President Donald Trump’s crypto-related business ties reportedly sparked late resistance among Democratic senators, ultimately blocking the measure from advancing.

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Following the vote, Senate Majority Leader John Thune expressed frustration, accusing Democrats of stalling progress despite previous compromises.

Prominent figures in the crypto space and on Capitol Hill voiced disappointment. Senator Lummis called the failed vote a missed opportunity, stressing that the U.S. must embrace its leadership role in the digital economy. Treasury Secretary Scott Bessent echoed this sentiment, emphasizing the need for America to guide the global development of stablecoins.

The Blockchain Association also weighed in, noting the setback while remaining optimistic about bipartisan momentum for future regulatory initiatives.

Alexander Stefanov