Senate Vote to Advance Major Crypto Regulation Bill Fails After Bipartisan Talks Stall
By Julie Tsirkin, Kate Santaliz, and Brennan Leach
Updated: [Insert Date]
WASHINGTON, D.C. — A pivotal Senate vote regarding a comprehensive cryptocurrency regulation bill fell short on Thursday, as Democratic senators united to block the measure amid stalled bipartisan negotiations. The proposed legislation, known as the GENIUS Act, aimed to establish the first regulatory framework in the United States for stablecoins—digital currencies typically pegged to traditional currencies like the U.S. dollar.
The procedural vote ended with a tally of 48 to 49, falling short of the 60 votes required for advancement. Joining all Democrats in opposition were Sens. Josh Hawley (R-Mo.) and Rand Paul (R-Ky.), both of whom expressed specific reservations about the bill. Notably, Senate Majority Leader John Thune (R-S.D.) voted "no" to preserve the possibility of bringing the measure back to the floor at a later date.
Legislative Background
Initially, the Senate Banking Committee had successfully passed the GENIUS Act in April with support from five Democrats. However, the trajectory changed significantly after Thune indicated that the Senate would swiftly consider the bill. Senate Minority Leader Chuck Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.), the ranking member of the Banking Committee, privately urged their colleagues to withhold support in order to extract further concessions from their Republican counterparts.
Democratic senators raised concerns over provisions that would restrict members of the executive branch, including former President Donald Trump and his family, from owning or trading cryptocurrency, alongside calls for enhanced anti-corruption measures.
Before the vote, Sen. Ruben Gallego (D-Ariz.), who had been actively involved in ongoing negotiations over the legislation, requested unanimous consent to delay the vote until Monday, aiming to skip one of the procedural steps to maintain momentum. However, Warren rejected this request, emphasizing that she would not vote in favor of advancing the bill without receiving updated legislative text that reflected recent negotiation progress.
Points of Contention
Multiple issues contributed to the Democratic opposition. For one, a key provision seeking to prohibit elected officials from issuing stablecoins was omitted in negotiations, prompting concerns about constitutional validity. “A lot of us had recognized that it made it very difficult for Republicans,” Gallego stated regarding the removed provision.
Changes to the bill had already been made in response to Democratic input after it was reported out of committee, including preserving state regulatory authority over foreign-issued stablecoins and broadening transaction monitoring for stablecoin users.
Post-vote, Thune expressed disappointment, stating that opportunities for Democrats to amend the bill had been missed, alleging that if they were genuinely interested in making changes, they would have permitted the legislative process to continue.
In contrast, Hawley indicated that he could not support the bill without a provision ensuring that tech companies would be barred from owning stablecoins. Paul cited concerns about over-regulation as his rationale for opposing the legislation, expressing a resistance to federal regulations in general.
Ongoing Negotiations and Future Prospects
This week, bipartisan negotiations included key senators passionate about crypto, led by Banking Committee Chair Tim Scott (R-S.C.). Several senators were present, including Bill Hagerty (R-Tenn.) and Cynthia Lummis (R-Wyo.). Hagerty, who led negotiations that ultimately regained Democratic backing, acknowledged that significant issues remained unresolved, such as the need for stronger anti-money laundering provisions.
The recent announcement of an Abu-Dhabi backed investment firm planning to invest heavily in Trump’s cryptocurrency venture, World Liberty Financial, fueled Democratic criticism, prompting claims of potential corruption linked to the former president’s dealings.
In response to ongoing scrutiny, lawmakers like Warren and Gillibrand have introduced new legislation aimed at preventing public officials from exploiting their positions to profit from cryptocurrencies. Their initiatives underscore a growing concern among Democrats regarding potential conflicts of interest involving high-profile crypto ventures.
While the GENIUS Act does not target meme coins—cryptocurrencies that gain value through internet culture—supporters of the bill assert that it includes essential protections against fraud and money laundering in the crypto space. Despite the failed vote, the dialogue over cryptocurrency regulations continues, with senators acknowledging the complexities of the digital assets landscape.
Conclusion
The stalling of the GENIUS Act highlights the ongoing bipartisan challenges in Congress regarding the regulation of cryptocurrencies. As senators navigate the intricacies of this evolving industry, discussions are expected to continue in the months ahead, aiming to strike a balance between innovation and the safeguarding of both investors and the financial system.
For further updates on this legislation and other topics, stay tuned to NBC News.
Julie Tsirkin is a correspondent covering Capitol Hill. Kate Santaliz is an associate producer for NBC News’ Capitol Hill team. Brennan Leach is a Desk Assistant for NBC News.
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