A group of nine pro-crypto Senate Democrats unexpectedly withdrew their support for the Republican-led stablecoin bill in the final stages before the Senate floor vote, putting the legislation's passage at risk.
These Democrats, who had previously backed the bill when it passed the Senate Banking Committee in March, stated that the bill "still has numerous issues that must be addressed" and warned they would not support a procedural vote to advance it unless changes are made.
Key concerns include the need for stronger safeguards on anti-money laundering, national security, foreign issuers, and accountability for noncompliant actors.
The group includes Senators Ruben Gallego, Mark Warner, Lisa Blunt Rochester, Andy Kim, Raphael Warnock, Catherine Cortez Masto, Ben Ray Luján, John Hickenlooper, and Adam Schiff. Notably, Senators Kirsten Gillibrand and Angela Alsobrooks, co-sponsors of the bill, did not sign the opposition statement.
Despite their opposition, these Democrats expressed willingness to continue working on improving the bill to create responsible crypto regulation.
The bill, known as the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, aims to establish the first U.S. regulatory framework for stablecoins, which are digital tokens pegged to assets like the U.S. dollar.
The legislation has been championed by the crypto industry as a crucial step toward regulatory clarity and wider adoption. However, the Democrats' last-minute reversal reflects ongoing concerns within the party about consumer protections and financial system risks associated with stablecoins.
The Senate is expected to begin floor consideration of the bill soon, with the first vote potentially occurring next week. The Democrats' opposition could give them leverage to push for additional amendments before the bill can advance.
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