As President Donald Trump prepares to welcome the top investors in his meme coin to a private dinner, centrist Senate Democrats gave a different kind of gift to the crypto industry on Monday. Two weeks after helping tank an earlier vote on the so-called stablecoin bill, a group of 16 Democrats voted with nearly every Republican to push the bill past a filibuster threat.
While supporters said the bill would give clarity to an industry that has operated in a legal gray zone, critics warned that stablecoins pose a threat to the larger financial system. They also questioned why Democrats were giving Trump a victory on a bill that could enrich the president himself.
“We need a unified Democratic opposition. We need Democrats zeroing in on the GOP plan, and not muddying the message by getting behind an unrelated, corruption-friendly crypto bill this week instead,” Ezra Levin, co-executive director of the progressive group Indivisible, said in a statement.
Crypto Flip-Flop
The Senate’s vote for cloture on the GENIUS Act represented an industry win after a setback only 11 days before.
Stablecoins are supposed to represent one of the safest sectors of the cryptocurrency industry. In theory, dollar-denominated stablecoins are backed 1:1 by sound assets such as U.S. Treasury bills. Supporters say stablecoins could be used to make sending payments easier and cheaper. Critics say that, so far, their use cases have more often lain in buying other crypto assets and evading money-laundering laws.
The crypto industry has put its weight in Washington behind stablecoin legislation, hoping that it can serve as the first step toward passage of a larger agenda. Yet despite a record of bipartisan backing, centrist Senate Democrats pulled their support for the bill only days before it was set to receive its first vote on the Senate floor.
Those Democrats said they had lingering concerns about issues including anti-money laundering protections, illicit transactions, and the soundness of the financial system.
After that initial, failed vote, Democrats engaged in extensive closed-door talks with the legislation’s Republican boosters. Ahead of the vote Monday, senators received copies of a proposed compromise.
Democrats backing the new version of the legislation said that it would address concerns that Big Tech companies could dominate the new industry and expand surveillance on their own customers if allowed to issue stablecoins. They claimed that it also strengthened protections for stablecoin holders if their issuers go bankrupt.
