Senate Democrats are putting the brakes on advancing the GENIUS Act, a landmark stablecoin bill, due to concerns over former President Donald Trump’s expanding crypto ventures. Over the weekend, Sen. Ruben Gallego, flanked by eight Democratic colleagues, announced their refusal to support the bill in its current form, citing Trump’s potential personal gains. This move throws a wrench into the legislative process, which requires 60 Senate votes to proceed, and raises broader questions about future crypto regulatory frameworks.
Trump’s Crypto Connections Stir Doubt
The tension stems from two recent announcements: Trump’s dinner event for memecoin holders and Abu Dhabi’s MGX firm’s plan to use Trump-backed World Liberty Financial’s USD1 stablecoin for Binance investments. These developments suggest Trump’s crypto endeavors could yield him hundreds of millions, according to USA Today. Trump, however, refuted these claims in a Meet the Press interview, asserting his non-profit stance and emphasizing crypto’s strategic importance against China’s advancements. For more on this, see our coverage of World Liberty’s Stablecoin Will Be Used to Close MGX’s $2B Binance Investment.
The Democrats’ hesitation isn’t solely about stablecoins. The bigger elephant in the room is the comprehensive market structure legislation that the crypto industry has long awaited. This bill, crucial for defining the regulatory roles of the SEC and CFTC, may experience delays due to the current stalemate over the stablecoin act. A source close to the legislative process hinted that while the stablecoin bill might eventually pass, the ongoing political drama could derail the broader market structure agenda.
Legislative Hurdles and Political Intrigue
Senate Minority Leader Chuck Schumer has been quietly cautioning fellow Democrats to withhold support, according to CoinDesk. Meanwhile, Sen. Elizabeth Warren took to Bluesky—voicing her concerns about the MGX deal and its implications on the Trump family’s finances. She, alongside Sen. Jeffrey Merkley, has urged the U.S. Office of Government Ethics to scrutinize the deal, signaling an intensifying scrutiny of Trump’s crypto ties.
Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, added fuel to the fire by obstructing efforts for a joint House hearing on market structures. This political maneuver underscores the Democrats’ growing unease over Trump’s influence in the crypto sector.
Jaret Seiberg, a financial-policy expert at TD Cowen, remarked in a client note that Trump’s involvement complicates Democratic support for the stablecoin bill. Yet, he remains optimistic, believing the bill will eventually clear the Senate. Seiberg noted the formidable political clout of the crypto lobby, which seems poised to wield its influence to secure legislative backing. As noted in Trump’s Crypto Sherpa Bo Hines Says Crypto Legislation on Target for Quick Completion, there is a concerted effort to expedite the legislative process.
The Crypto Lobby Weighs In
Lobbyists from the crypto industry are sounding the alarm. A joint statement from leading organizations like the Blockchain Association and the Crypto Council for Innovation emphasized the necessity of a regulatory framework to bolster stablecoin adoption and maintain the dollar’s digital dominance. Their message was clear: Senators should push forward the GENIUS Act to pave the way for a bipartisan stablecoin framework.
The National Venture Capital Association echoed this sentiment, stressing the importance of regulatory clarity for fostering innovation and maintaining U.S. leadership in digital finance. CEO Bobby Franklin highlighted the potential of a robust stablecoin framework to propel the venture capital sector and solidify America’s position in global financial tech.
Looking Ahead
As the dust settles, the road ahead for both the stablecoin and market structure bills remains uncertain. The intertwining of Trump’s crypto dealings with legislative progress has created a complex political landscape that lawmakers must navigate. While the GENIUS Act’s passage seems probable, the broader implications for future crypto regulation are still unfolding. The coming weeks will test the resilience of the crypto lobby and the political will of Congress to reach a compromise that satisfies both regulatory needs and political realities.
Source
This article is based on: Trump’s Ties Make Crypto’s Democrat Allies Stomp Brakes on Bills
Further Reading
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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.
