A bill aimed at establishing a regulatory framework for U.S. dollar-pegged cryptocurrency tokens, known as stablecoins, encountered a major setback in the U.S. Senate on Thursday. The legislation, which had gained significant momentum, failed to clear a crucial procedural hurdle, frustrating the crypto industry’s efforts for clearer regulatory guidelines. The sector had invested over $119 million backing pro-crypto candidates in the 2024 elections, hoping to secure the passage of such legislation.
Stablecoins are cryptocurrencies designed to maintain a consistent value, typically pegged 1:1 to the U.S. dollar. They are increasingly used by crypto traders to facilitate fund transfers between tokens and are seen by proponents as a potential tool for instant payments. With their use surging in recent years, there was initial optimism that the GENIUS Act, the proposed stablecoin bill, would pass in 2025. However, it has faced considerable resistance, especially from Senate Democrats.
In Thursday’s vote, the bill received 49 votes in favor of advancing to a full Senate vote, falling short of the 60 votes required to end debate and move forward. Notably, two Republican senators, Josh Hawley and Rand Paul, joined Democrats in voting against the bill, further complicating its path.
Senator Mark Warner, a Democrat who had previously supported the bill, expressed reservations following the vote, stating, “While we’ve made meaningful progress on the GENIUS Act, the work is not yet complete. I simply cannot in good conscience ask my colleagues to vote for this legislation when the text isn’t finished.”
A group of Democrats, including Warner, pointed out that Republicans had not engaged in sufficient negotiations regarding key provisions on foreign stablecoin regulations and anti-money-laundering safeguards. Concerns among Senate Democrats were amplified by recent news that Trump-affiliated crypto business World Liberty Financial would use its stablecoin in a $2 billion investment deal with the Abu Dhabi-based investment firm for the Binance exchange.
The setback underscores the ongoing divisions and challenges in advancing comprehensive cryptocurrency regulations in Congress.
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