The U.S Senate blocked a vote on the GENIUS Act, delaying stablecoin regulatory reform efforts.
Ripple and the SEC reached a $125M settlement, potentially ending their multi-year legal dispute.
Treasury officials and crypto leaders urge bipartisan action to prevent innovation from moving offshore.
The U.S. Senate failed to advance the GENIUS Act, a proposed bill intended to establish clear regulatory standards for stablecoins. The setback highlights ongoing divisions within Congress on digital asset oversight, prompting calls from key industry figures and Treasury officials for swift, bipartisan action to maintain U.S. leadership in the evolving crypto landscape.
The U.S. Senate could not muster enough votes on May 9 to place the Generational Economic Nexus for Innovation and U.S. Security (GENIUS) Act to a full vote. The law aimed at creating a federal regulatory regime over stablecoins could not muster enough threshold to carry a cloture.
Several Democratic senators, Ruben Gallego (D-AZ), and Kirsten Gillibrand (D-NY), did not support pushing the bill further because they did not feel sufficient time had been allotted for reading the new amendments. Other Republican lawmakers such as Senator Rand Paul (R-KY) also raised objections to the measure.
The bill’s failure to progress was due to the changing character of its provisions. Co-sponsor senator Mark Warner (D-VA) said that the bill had still not been drafted and was not suitable for a final vote. Although delayed, legislative sources reported that a revised copy of the bill may come up for review in the week ahead.
Industry Response and Regulation Call
Treasury Secretary, Scott Bessent, described the GENIUS Act as a “once-in-a-generation opportunity” to reinforce the standing of the U.S. dollar in the financing world by introducing the use of regulated stablecoins. He made it clear that putting off well defined regulatory standards may mean risking outsourcing innovation abroad. His remarks were echoed by Ripple CEO Brad Garlinghouse who called on the lawmakers to move faster to regulate crypto. Garlinghouse pointed out that the number of stablecoins that are adopted on a global scale is growing and emphasized the need for American leadership in formulating the world standards.
Galaxy Digital’s Mike Novogratz also emphasized the need for bipartisan cooperation in order to make stablecoin legislation pass as it is relevant for national economic competitiveness.
Ripple and SEC come to partial legal resolution.
Ripple Labs and the U.S. Securities and Exchange Commission (SEC) made a separate announcement of a proposed settlement that would conclude a major part of their long standing legal dispute. Ripple agreed as part of a joint court filing to pay $50 million to the SEC and will receive a refund of $75 million. This result brings down the initial August 2023 fine of $125 million.
Caroline Crenshaw, commissioner, dissented, calling the settlement a violation of legal enforcement for securities violations. The agreement is an outcome of recent changes in the SEC enforcement strategy, such as the disposals of other eye catching cases during the Trump administration stated intention to reform regulatory approaches to digital assets.
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