The Republican-led effort to pass the GENIUS Act—a bill that would establish the first federal rules for stablecoins—has hit a major snag. Despite plans to bring the bill to the Senate floor on Thursday, a coalition of Senate Democrats has walked back its support, citing concerns over both policy omissions and partisan maneuvering.
Originally hailed as a bipartisan breakthrough, the GENIUS Act aims to provide legal guardrails for U.S. dollar-pegged stablecoins and bring consistency to the fast-growing digital asset market. But the bill’s future now hangs in the balance.
Senate Majority Leader John Thune triggered a fast-track process last week, skipping over further markup discussions and locking in a version of the bill that many Democrats say stripped away essential guardrails.
Democrats Cry Foul Over Floor Text Surprise and Weak Safeguards
Nine Senate Democrats issued a joint statement on Saturday announcing they would no longer support the bill in its current form. They had previously voted for the bill during committee deliberations in March.
“We entered these talks in good faith,” they wrote, “but this version walks back the protections we worked hard to include.” Chief among their concerns were watered-down anti-money-laundering measures and a lack of safeguards against foreign interference.
Sen. Ruben Gallego, a lead negotiator, took to X to express frustration, saying Republicans pushed a floor version that “ignored weeks of negotiation.”
Some lawmakers were reportedly blindsided by the official text, which was not shared until it went public—further souring bipartisan efforts.
Trump Ties Add Political Heat to Stablecoin Bill
A growing source of Democratic resistance centers on the Trump family’s increasing involvement in crypto. A recent deal involving World Liberty Financial—linked to Donald Trump’s business interests—and a $2 billion investment from the UAE has raised ethical concerns.
Sen. Elizabeth Warren warned colleagues that the stablecoin used in the transaction had surged in global rankings due to what she called “a shady arrangement” and urged a pause on the GENIUS Act.
House Democrats have now organized a hearing to scrutinize the Trump family’s crypto dealings, raising the specter of potential conflicts of interest influencing federal crypto policy.
With the floor vote fast approaching, Republicans face mounting challenges. While the White House and GOP leaders aimed for passage by August, the lack of Democratic support could stall the effort or force major revisions.
The GENIUS Act is now a legislative flashpoint—caught between the urgency to regulate and the politics of perception.
