GENIUS Act Falls Short of Senate Vote by One
The Guiding and Establishing National Innovation for US Stablecoins of 2025 (GENIUS) Act, a bipartisan bill that would regulate stablecoins, fell short in the Senate on May 8. Failing to advance by one vote shy of the 60 needed for cloture, the legislation was effectively killed following an unexpected flip-flop by Senate Democrats.
The GENIUS Act was introduced by Republican Sen. Bill Hagerty and co-sponsored by co-sponsors Sens. Tim Scott (R), Kirsten Gillibrand (D), Cynthia Lummis (R), and Angela Alsobrooks (D). The bill was intended to establish a regulatory framework for payment stablecoins, digital currencies pegged to the U.S. dollar, with the goal of increasing clarity and bolstering the dollar’s status as the global reserve currency.
Supporters applauded the bill as a major improvement over crypto regulations, trying not to risk even more controversial battles over decentralized finance and the definition of digital assets.
Though the bill had initial bipartisan support, Democratic senators promptly switched against the bill after complaining about President Donald Trump’s business relationship with cryptocurrency projects. Democratic caucus opponents argued that approving the bill would be perceived as endorsing the former president’s growing presence within the crypto industry.
Despite modifications to fulfill Democratic needs—most significantly ones strengthening Anti-Money Laundering (AML) requirements on stablecoin issuers—apprehensions around political appearance and influence eventually quashed the vote.
“The potential for endorsing crypto projects associated with Trump without total openness is unthinkable,” said one Senate aide briefed on the conversations.
Political Pressure Undermines Regulatory Advances
The demise of the GENIUS Act demonstrates just how far-reaching crypto legislation has become in being involved in partisan politics. The bill was seen as an opportunity for both parties to come together around a regulatory attempt that specifically addressed narrowly dollar-backed stablecoins for payment purposes—steering clear of more politically charged crypto issues like decentralized finance or token classification.
By going after payment stablecoins, lawmakers aimed to promote dollar usage globally and provide predictability to crypto businesses operating in the U.S. But the last-minute political maneuvering shows how regulatory initiatives can be rapidly diverted by election-year politics and loyalties.
GOP Senators Voice Outrage
Senate Majority Leader John Thune was disapproving following the vote, criticizing that Democrats had been accommodated throughout. “Democrats have been accommodated every step of the way. This was a common-sense bill,” Thune said. “Frankly, I just don’t get it.”.
As the GENIUS Act languishes, the future of stablecoin regulation in the United States remains uncertain. Crypto market experts and lawmakers will now probably resort to alternative legislative proposals or executive action as pressure intensifies to subject the growing digital asset market to clearer rules.
