The U.S. Senate Banking Committee has moved forward with a significant piece of legislation aimed at regulating stablecoins within the crypto industry, marking an important step towards sending the bill to President Trump for his signature.
With its initial approval by the committee, this bill, which focuses on federal-level oversight of stablecoin issuers in the U.S., now requires full Senate approval. A comparable bill is also pending in the House of Representatives. While there are several obstacles ahead, including the need to reconcile differing versions from both chambers, this legislation was advanced with an 18-6 vote.
Several Democrats on the committee recognized the necessity of the bill but attempted to propose various amendments for stricter regulatory measures, all of which were dismissed along party lines.
Senator Elizabeth Warren, the leading Democrat on the panel, voiced her concerns about specific elements of the bill, labeling them “a clear threat to our national security” in its existing state. Warren grew increasingly exasperated throughout the 2.5-hour hearing as her amendment suggestions were rejected.
“It would be reckless to push this bill forward with so many acknowledged flaws, especially at a time when reports are surfacing about Trump attempting to establish his own stablecoin with a company known for legal violations,” Warren stated towards the end of the hearing, referencing discussions involving a Trump-associated entity and a cryptocurrency exchange. “Rushing this through while Trump is arranging a deal with a dubious stablecoin provider is nonsensical. We’ll come to regret this.”
Another Democrat, Catherine Cortez Masto from Nevada, expressed dissatisfaction with the committee’s Republicans for disregarding debate during the markup, which is intended to consider and discuss amendments to proposed legislation, noting that several of them were absent from the hearing.
“This is a promising beginning, but it’s not ready for prime time,” she remarked about the bill driven by Republican lawmakers.
“Markups involve a lot of back and forth,” responded panel Chairman Tim Scott, a Republican from South Carolina. “We have been tirelessly working to make this happen.”
Senator Bill Hagerty from Tennessee, the primary author of the legislation, described the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) as a “truly bipartisan endeavor” that has incorporated Democratic perspectives. It also has the backing of Democrats Kirsten Gillibrand and Angela Alsobrooks, alongside numerous Republican supporters.
“It outlines sensible regulations that safeguard consumers, encourage competition, and stimulate innovation,” Hagerty stated. “It’s crucial that we provide the clarity and stability that our country and innovators urgently require.”
The crypto sector is banking on a growing bipartisan majority in both legislative chambers to support its policy initiatives this year. Recently, a separate attempt to overturn an IRS rule that the crypto community opposes garnered significant bipartisan support.
Read More: Crypto’s IRS Victory Reveals Reach in Congress That Demands Less Compromise
Last term, the Democratic-led Senate Banking Committee stymied crypto legislation that had progressed through the Republican-controlled House. With the 2024 elections leading to Republican control in both chambers, Scott has prioritized stablecoin legislation as one of his major objectives.