A significant setback hit the cryptocurrency sector in the United States on May 8, 2025, as the Guiding and Establishing National Innovation for US Stablecoins of 2025 Act, or the GENIUS Act, failed to pass cloture in the Senate. Despite being a bipartisan initiative aimed at providing clarity in the murky waters of digital asset regulation, last-minute resistance from Democrats, fueled by concerns over President Donald Trump’s cryptocurrency dealings, led to the bill’s demise.
Democratic Resistance and the Bill’s Downfall
The GENIUS Act, spearheaded by Senator Bill Hagerty with co-sponsorship from several others including Senators Tim Scott and Kirsten Gillibrand, was touted as a vehicle to cement the United States’ role as a leader in the digital currency space. By focusing the legislation on stablecoins—digital assets pegged to traditional currency values used for everyday transactions—the bill sought to extend the dollar’s reach in international markets while sidestepping more contentious crypto debates. This legislative effort follows previous movements in the Senate, as detailed in our article on U.S. Senate Moves Toward Action on Stablecoin Bill.
However, the eleventh-hour Democratic pushback proved insurmountable. Democrats were reportedly concerned about the broader implications of Trump’s involvement in crypto ventures and demanded amendments to tighten requirements, particularly around Anti-Money Laundering (AML) provisions for stablecoin issuers. Despite these concessions, the legislative effort stalled, leaving proponents frustrated.
Senate Majority Leader John Thune did not mince words in his reaction, stating, “Democrats have been accommodated every step of the way […] frankly, I just don’t get it.” His comments underscore a palpable frustration in Republican ranks, highlighting the difficulty in achieving consensus on digital asset governance.
A Disappointing Outcome for Advocates
The failure to advance the GENIUS Act reverberated across social media, with key figures voicing their dismay at the stagnation in establishing a coherent framework for digital assets. Senator Cynthia Lummis, a vocal advocate for cryptocurrency, expressed her disappointment: “I’m deeply disappointed that we were unable to pass this important, bipartisan-crafted stablecoin legislation today. Make no mistake, digital assets are the future and America must lead the way.”
Treasury Secretary Scott Bessent echoed these sentiments in a detailed statement on X (formerly Twitter), emphasizing the necessity of American leadership in the digital currency sphere for stablecoins and other digital assets to flourish on the global stage. Meanwhile, industry innovations continue, as seen in the recent partnership between Visa and Baanx to launch USDC Stablecoin Payment Cards, which highlights the growing integration of stablecoins in everyday transactions.
Kristin Smith, CEO of the Blockchain Association, acknowledged the setback but remained optimistic, noting the encouraging bipartisan dialogue the GENIUS Act had sparked. “While disappointed that the GENIUS Act did not pass its cloture vote today, we remain encouraged by the bipartisan engagement on this critical digital asset legislation,” she stated.
The Road Ahead
The roadblock faced by the GENIUS Act is a reflection of the broader challenges in regulating the fast-evolving crypto industry. Stablecoins, often seen as a bridge between traditional finance and the digital economy, are pivotal to this debate. With the dollar’s dominance at stake, the United States’ approach to stablecoin regulation could have profound implications not just domestically, but internationally.
As lawmakers regroup, questions about the future direction of U.S. crypto regulation loom large. Will a revised version of the GENIUS Act resurface with modifications to appease Democratic concerns? Or will new legislative initiatives emerge from the shadows? The answers remain uncertain, but what’s clear is that the conversation around digital assets and their regulation is far from over.
In the meantime, industry stakeholders and policymakers alike will need to navigate the complexities of this evolving landscape. As the global crypto ecosystem continues to expand, the pressure mounts for the United States to establish a regulatory framework that not only supports innovation but also safeguards financial stability. Until then, the digital asset community watches and waits—anticipating the next move in this high-stakes regulatory chess game.
Source
This article is based on: US Stablecoin bill blocked as Democrats withdraw support
Further Reading
Deepen your understanding with these related articles:
- Tether’s U.S.-Focused Stablecoin Could Launch Later This Year, CEO Paolo Ardoino Says
- Ripple Offered $4B-$5B for Stablecoin Issuer Circle: Bloomberg
- SEC Ditches PayPal’s PYUSD Probe, Removing Key Regulatory Hurdle for Its Stablecoin
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
