Senate to Vote on GENIUS Bill Amid Trump Crypto Ties

Senate Republicans push forward with landmark stablecoin legislation despite waning Democratic support, as concerns about Presidential crypto ties and national security safeguards threaten to derail the first major cryptocurrency regulatory framework.

The U.S. Senate is scheduled to vote Thursday on the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, marking a pivotal moment for cryptocurrency regulation despite growing resistance from Democrats and divisions within Republican ranks.

Democrats Withdraw Support As Trump Crypto Ventures Raise Concerns

A group of nine pro-crypto Democratic senators have withdrawn their support for the GENIUS Act, citing concerns over the bill’s current form and potential conflicts of interest with the Trump administration’s cryptocurrency ventures, according to Ledger Insights.

The political landscape shifted dramatically after Trump-backed World Liberty Financial unveiled plans to launch a stablecoin called USD1. Last week, during an event in Dubai, the company announced that Abu Dhabi’s MGX would use this stablecoin to pay the $2 billion it planned to invest in the Binance cryptocurrency exchange.

“This is corruption and no senator should support it,” said Senator Elizabeth Warren, according to Ledger Insights. Warren’s fact sheet to Senate Democrats outlined how the bill falls short on safeguarding against corruption and protecting consumers, the financial system, and national security.

Bill Faces Challenging Path To 60-Vote Threshold

Senate Majority Leader John Thune filed a procedure on May 6 to end debate on the GENIUS Act and move to a vote, but the legislation now requires at least 60 votes to advance in the evenly divided chamber, meaning substantial bipartisan support is needed.

“You can’t try to f*** us and then say, hey, deal with it,” said Democratic Senator Ruben Gallego of Arizona, a member of the Senate Banking Committee, according to CBS News. Gallego emphasized that the bill had advanced from committee with the understanding that improvements would be made before a floor vote.

Several key Republicans have also indicated potential opposition, including Senators Rand Paul of Kentucky, Josh Hawley of Missouri, and John Kennedy of Louisiana, further complicating the path to passage.

Regulatory Framework For A Growing Industry

The GENIUS Act aims to create clear rules for stablecoin issuers, requiring licenses for financial institutions and cryptocurrency firms seeking to engage in stablecoin issuance. The bill would establish a tiered regulatory system with firms under $10 billion regulated by states and larger issuers overseen by the Federal Reserve or the Office of the Comptroller of the Currency.

The legislation includes reserve requirements to ensure tokens can be redeemed for actual dollars without issues, addressing a key concern in the cryptocurrency industry. These provisions have drawn support from major industry players like Coinbase, whose CEO Brian Armstrong has publicly backed the bill.

“The world is moving toward a digital currency future, and we have a chance with the GENIUS Act to ensure America leads rather than follows,” said Senator Bill Hagerty, the bill’s primary sponsor, at a press briefing on Wednesday.

Calls For Stronger Safeguards And Conflict-Of-Interest Provisions

Democrats who have withdrawn support are pushing for several amendments, including stronger anti-money laundering provisions, restrictions on foreign issuers, enhanced national security safeguards, and accountability measures for non-compliant entities.

A central demand in Warren’s fact sheet is for elected officials and their families to be barred from owning, buying, selling, or otherwise participating in stablecoin business ventures, directly addressing concerns about Trump family interests in the cryptocurrency space.

Mark Hays, associate director for cryptocurrency and financial technology at Americans for Financial Reform, cautioned that while enhancing safety in crypto markets is important, “if you do it wrong, you can create the crisis you sought to avoid,” as reported by The American Prospect.

Vote Comes Amid Broader Crypto Regulatory Push

The GENIUS Act vote comes as part of a broader push for cryptocurrency regulation under the new Trump administration. The industry has been advocating for comprehensive legislation, with particular focus on the Financial Innovation and Technology for the 21st Century Act (FIT21), which passed the House last year but never received a Senate vote.

While the stablecoin bill represents a significant step forward, industry experts note that it addresses only one segment of the cryptocurrency ecosystem. Future legislation would still be needed to clarify the regulatory authority of the Securities and Exchange Commission and the Commodities Futures Trading Commission over different types of digital assets.

The outcome of Thursday’s vote could signal whether comprehensive cryptocurrency regulation is possible in the current political environment, potentially setting the stage for additional legislative efforts in the coming months.