A group of nine Democratic Senators announced that they will withdraw their support for the landmark U.S. stablecoin legislation unless changes are made to the bill.
In a joint statement issued on May 3, the Senators noted that there are several issues with the current version of the stablecoin bill known as the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The Senators noted:
“While we are eager to continue working with our colleagues to address these issues, we would be unable to vote for cloture should the current version of the bill come to the floor.”
The statement was signed by Senators Raphael Warnock, Catherine Cortez Masto, Ben Ray Luján, John Hickenlooper, and Adam Schiff. Surprisingly, Senators Ruben Gallego, Mark Warner, Lisa Blunt Rochester, and Andy Kim, all of whom supported the bill when it passed the Senate Banking Committee in March, were also among the signatories.
It is worth noting, however, that the two Senate Democrats co-sponsoring the GENIUS Act alongside lead sponsor Republican Senator Bill Hagerty — Kirsten Gillibrand and Angela Alsobrooks — did not sign the statement.
Senate Democrats want tighter regulations under the GENIUS Act
In their statement, the Senate Democrats noted that it is “critical for Congress to work in a bipartisan fashion” to establish clear rules and guidelines for stablecoins. Absence of such regulations leaves consumers “unprotected and vulnerable,” they stated.
However, they are determined to withhold support for the bill unless revisions are made. They added:
“We have approached this process constructively and with an open mind, with the understanding that additional improvements to the bill would be made.”
The Senate Democrats believe that the GENUIS Act needs “stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system, and accountability for those who don’t meet the act’s requirements.”
It is worth noting that these nine Senate Democrats are not the only ones opposed to the bill. Senator Elizabeth Warren, one of the bill’s staunchest critics, warned that the bill could “green-light big-tech companies and other conglomerates to issue their own stablecoins.”
In a letter last month, a group of 20 community banking organizations also voiced their objections, arguing that the bill could displace traditional deposits and expose the financial system to new vulnerabilities.
All about the GENIUS Act
Hagerty, who authored the GENIUS Act, introduced the bill on Feb. 4, 2025. The bill aims to provide a regulatory framework for U.S. payment stablecoins. The passage of the GENIUS Act, therefore, will be the first step towards establishing comprehensive crypto regulation in the U.S.
Under the proposed GENIUS bill, stablecoin issuers will have to ensure that each issued token is backed 1:1 by U.S. Dollars, insured bank deposits, or short-term Treasury bills. Stablecoin issuers will also be able to choose between federal oversight under the Office of the Comptroller of the Currency (OCC) and state-level supervision.
The Senate Banking Committee passed the GENIUS Act in March with an 18-6 vote. Since then, Republicans have made changes to the bill, hoping to win over Democrats, according to a report by Politico. In fact, many of the changes pertained to the issues raised by the Senate Democrats in their statement on Saturday.
Republicans were assured of bipartisan support for the bill, so much so that Senate Majority Leader John Thune formally moved to expedite the consideration of the bill earlier this week. Senate Republicans were hoping to push the GENIUS Act for a floor vote by the end of May.
According to Politico, the first procedural vote for the bill is expected as soon as next week. However, the statement by the Senate Democrats is likely to put a kink in the Republicans’ plan, while giving them more leverage to extract more concessions.
The bill requires the support of at least seven Democrats to pass the Senate.
Sen. Hagerty responds to the Democrats’ statement
Responding to the statement issued by the Senate Democrats, Hagerty stated that it is time the U.S. advances legislation that will ensure its leadership in the digital asset space and protect the U.S. Dollar “for centuries to come.” He added:
“We have a choice here. Move forward and make any remaining changes needed in a bipartisan way, or show that digital asset and crypto legislation remains a solely Republican issue.”
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