A crucial vote on legislation aimed at regulating payment stablecoins faces a setback as Senate Democrats withdraw their support.
According to The Hill, the GENIUS Act failed to secure the necessary 60 votes to advance, with a final tally of 48-49 against ending debate on the motion to proceed.
The defeat comes after several Democratic senators retracted their backing over the weekend, citing concerns about insufficient provisions for anti-money laundering and national security measures. Senate Republicans' attempt to expedite the voting process drew criticism from their Democratic colleagues, who argued they needed more time to review the updated bill text and continue negotiations.
Senate Majority Leader John Thune strategically changed his vote from yes to no, preserving the option to reintroduce the measure later. The procedural maneuver highlighted the growing tension between the two parties over the bill's timeline. Republicans expressed frustration with their Democratic counterparts, maintaining that months of work and feedback had already been incorporated into the legislation.
Sen. Ruben Gallego, speaking before the vote, emphasized the need for additional time to refine the legislation. His request for a unanimous consent to postpone the vote until Monday was denied.
Treasury Secretary Scott Bessent criticized the Senate's decision, warning that the United States risks losing its competitive edge in financial innovation to other countries.
The failed vote coincides with President Trump's expanding presence in the cryptocurrency sector. His family's venture, World Liberty Financial, recently announced a $2 billion transaction involving their stablecoin, connecting Emirati firm MGX with crypto exchange Binance.
Democratic lawmakers, including Sen. Elizabeth Warren, have voiced strong opposition to the deal, suggesting it could compromise U.S. government interests. The transaction has intensified scrutiny of the GENIUS Act and its potential implications.
The controversy has sparked broader political ramifications, leading to Democratic representatives walking out of a House hearing on market structure legislation.
The GENIUS Act had previously gained bipartisan support, securing approval from the Senate Banking Committee with five Democratic votes in March. Its House counterpart, the STABLE Act, also cleared the House Financial Services Committee last month.
Sen. Gallego stated:
We've made some great progress over this past week. I greatly, greatly appreciate the work that we've done in a bipartisan manner. The reason you're hearing some hesitancy, the legislation of this scope and importance really just cannot be rushed, and we need time both to educate our colleagues and people.
Sen. Thune responded to Democratic resistance:
If Democrats were interested in further changes as they claim, they would have had the chance to make those changes on the floor. All they had to do was vote for cloture. Not every bill that comes to the floor is a final bill. Now, that might be how it worked when they were in control, but Republicans are doing it differently.
The GENIUS Act, designed to establish a regulatory framework for payment stablecoins, failed to advance in the Senate after Democrats withdrew their support over concerns about anti-money laundering provisions and national security measures. The legislation's defeat comes amid growing scrutiny of President Trump's cryptocurrency ventures, particularly the recent $2 billion transaction involving his family's stablecoin through World Liberty Financial. The path forward for crypto regulation now faces significant challenges as lawmakers grapple with balancing innovation and security concerns in the digital asset space.
