A Fresh Take on the Stablecoin Saga: Pro-crypto Dems and Republicans Grab a Deal (...Sort Of)
Congress Edges Closer to Stablecoin Legislation Agreement as Lawmakers Compete Against Time
It's been a rollercoaster ride in the world of crypto, with drama spilling onto Capitol Hill recently. A close-knit group of senators from both sides of the aisle seems to be edging toward an agreement on stablecoin legislation, though the deal still hangs in the balance.
On Wednesday, a few pro-crypto Democratic senators, including Ruben Gallego (D-AZ), Mark Warner (D-VA), and Angela Alsobrooks (D-MD), sat down with their Republican counterparts to hash out terms that might win back their support for the GENIUS Act. Originally, they had withdrawn their support on Saturday, citing concerns that the latest draft didn't live up to their standards.
Sources close to the meeting dished to Decrypt that the senators had previously thrown their weight behind the bill, only to pull their support suddenly due to a multitude of factors. These included frustration among Democrats about being left out of negotiations on the bill's language, as well as escalating anger within the party over President Trump's perceived crypto-related conflicts of interest.
The president has spread his crypto tentacles into numerous ventures, including a meme coin called TRUMP (surprisingly worth over $10 billion) and the DeFi project World Liberty Financial. This DeFi project attracted over $550 million from accredited investors in a public token sale and has since issued its own stablecoin, as Decrypt previously reported.
Amidst the withdrawal of support, Senate Republicans, caught off guard, worked their magic by filing cloture on the GENIUS Act, setting a vote for Thursday that would set the legislative wheels in motion. Senate Majority John Thune (R-SD) promised that, should Democrats fail to back the bill, they'd cement the impression that crypto legislation remained a sole Republican issue.
Stablecoins play a vital role in the crypto market, allowing users to transition in and out of crypto trades, and facilitate international remittances, without the need for direct dollar access. Market observers believe the passage of stablecoin legislation would make Wall Street and banking giants more willing to dive into the crypto pool, potentially injecting billions, if not trillions, of dollars into the market.
All eyes were on the tense crypto landscape on Tuesday, as House Democrats staged a walkout from a digital assets hearing, protesting "Trump's crypto corruption." Crypto policy leaders fretted over the changing political winds on Capitol Hill, fearing that political jockeying could derail the emerging crypto legislation.
However, a glimmer of hope emerged Wednesday afternoon, as it appeared that some level of agreement had been reached between the parties. Gallego, Warner, and Alsobrooks held meetings with Thune, as well as pro-crypto Republican senators Bill Hagerty (R-TN) and Cynthia Lummis (R-WY). Sen. Kirsten Gillibrand (D-NY), who has not threatened to withhold her vote for the GENIUS Act, was also present, according to sources close to the meeting.
By the session's end, both sides seemed optimistic thanks to the progress they had made. The next challenge lies in turning verbal agreements into legislative language that all senators will support. However, it's uncertain whether the relationship between Republican and Democratic staffers is strong enough to get the bill across the finish line in time for Thursday's cloture vote. A source familiar with the matter told Decrypt that Democrats hope to delay the vote until next Tuesday, although Republicans may resist this delay.
As crypto super PACs hold their breath, the outcome of this drama may have significant implications for the 2026 midterms. Should the Republicans push the bill to a vote and fall short of the required 60 votes due to a lack of support from Democrats, the crypto legislation's momentum could take a severe blow, caution multiple crypto-focused D.C. insiders.
At the time of writing, it remains unclear what barriers Republicans had to break to regain the support of pro-crypto Democrats. Gallego's Saturday statement pointed to areas of concern, including anti-money laundering, foreign issuers, and national security. Crypto lobbyists believe these concerns may translate into stricter provisions aimed at preventing Tether's USDT token from trading on secondary markets and curbs against DeFi projects seen as threats to U.S. foreign policy.
Stay tuned for updates on this developing story, as lawmakers work tirelessly to shape the future of cryptocurrency legislation.
- The GENIUS Act, a stablecoin legislation, is teetering on the brink of agreement between a bipartisan group of senators.
- On Wednesday, pro-crypto Democratic senators Ruben Gallego, Mark Warner, and Angela Alsobrooks met with their Republican counterparts to discuss terms that might win back their support for the GENIUS Act.
- The bill, if passed, could inject billions, if not trillions, of dollars into the crypto market, as stablecoins play a crucial role in facilitating crypto trades and international remittances.
- Sources close to the meeting revealed that the senators had initially endorsed the bill but withdrew their support due to several factors, including concerns about the latest draft and Democrats' frustration over being excluded from negotiations on the bill's language.
- Senate Majority John Thune promised that if Democrats fail to back the bill, they'd reinforce the impression that crypto legislation remains a sole Republican issue.
- Amidst the withdrawal of support, Senate Republicans filed cloture on the GENIUS Act, setting a vote for Thursday.
- Crypto policy leaders are worried about the shifting political landscape on Capitol Hill, as House Democrats staged a walkout from a digital assets hearing over "Trump's crypto corruption."
- By the end of the meeting, both sides appeared optimistic about making progress, but turning verbal agreements into legislative language that appeases all senators is the next challenge.
- As the drama unfolds, crypto super PACs brace for the potential implications on the 2026 midterms, with a failure to pass the bill potentially dealing a severe blow to the momentum of cryptocurrency legislation.
