#USStablecoinBill


In the world of cryptocurrency, it is rarely boring, but recent events in the US Senate have thrown in a new dose of intrigue that directly affects everyone who uses stablecoins. A group of prominent Democratic senators, who just recently seemed to support some regulation in this area, suddenly declared: "Not in its current form!" This statement, made just before a crucial vote on the stablecoin bill, seriously questions the prospects for its swift adoption.

The bill in question is GENIUS (Guiding and Establishing National Innovation for US Stablecoins), led by Republican Senator Bill Hagerty. The goal is noble and long-awaited by the crypto industry: to finally create a federal legal framework for stablecoins – those digital anchors that are typically tied to the dollar and account for the lion's share of trading volume on cryptocurrency exchanges. The passage of such a law would, without exaggeration, be a historic milestone and a victory for an industry that has been saying for years: give us clear rules of the game!

But here’s the catch. Nine Democrats, including four who had already voted "for" this bill at the committee level (among them Senators Ruben Gallego, Mark Warner, Lisa Blunt Rochester, Andy Kim), suddenly changed their minds. Along with them, the letter was signed by Senators Raphael Warnock, Catherine Cortez Masto, Ben Ray Lujan, John Hickenlooper, and Adam Schiff. It is worth noting that the co-authors of the bill, Democrats Kirsten Gillibrand and Angela Alsbrooks, did not support this demarche. This, by the way, is itself curious and shows the lack of a unified stance even within one party on such an apparently important issue.

The essence of the complaints from the "rebelling" Democrats boils down to the fact that the bill "still has numerous problems that need to be addressed." They made it clear: they are not ready to vote to end the debate (essentially, to bring it to a final vote) in its current form. And to advance the bill in the Senate requires a certain number of votes from Democrats, and the position of these nine colleagues creates a serious obstacle.

The main "pain points," according to the Democrats, are insufficient provisions for combating money laundering (AML), gaps in the regulation of foreign issuers (hello, Tether, apparently?), national security issues, maintaining the safety and reliability of the US financial system, and accountability for non-compliance. They acknowledge that after committee approval, edits were made to the text to attract their votes, but they consider these changes insufficient, and Senator Gallego even stated that the bill "has rolled back from many achievements."

This unexpected turn of events came at a time when the bill was about to start being considered in the Senate, and the first procedural vote could have taken place in the coming days (according to the latest information, it has been postponed or is in serious doubt as behind-the-scenes battles continue). This, of course, gives Democrats additional leverage for negotiating concessions.

The atmosphere is also heated by external factors. Firstly, the deepening financial ties of the Trump family with the crypto industry. It is said that the firm founded by the former president's sons plans to launch its own stablecoin. Senator Elizabeth Warren, known for her skepticism towards crypto, is actively pushing this issue, referring to reports of a large deal involving these future tokens. This adds an unpleasant flavor of potential conflict of interest to an otherwise regulatory matter. Secondly, Senate Minority Leader Chuck Schumer, whose stance on crypto has noticeably softened over the past year (oh, Washington!), is also reportedly urging his party members not to rush, in order to maximize their influence on the final text, especially regarding the regulation of such giants as the aforementioned Tether.

Despite the tough stance on the current version, Democrats seem to express a willingness to continue working. They do not deny that regulation is needed – after all, its absence leaves users unprotected against "predatory practices." In other words, the message is: we support regulation, just not this kind of regulation.

Republicans, represented by Senator Hagerty, of course, insist: we must move forward, otherwise American leadership in digital assets will hang in the balance. He calls for bipartisan cooperation; otherwise, "digital asset legislation will remain an exclusively Republican issue" – which, obviously, reduces its chances of adoption in the current power dynamics. Senator Gillibrand, a co-author of the bill, believes that the best way to address possible ethical issues (for example, those related to the Trump family) is to establish clear rules rather than leaving it the Wild West. There is logic in this.

Caitlin Long from Custodia Bank, by the way, previously expressed hope that federal law could bypass the not-so-positive position of the Federal Reserve, which, according to her, blocks banks from working directly with crypto and issuing stablecoins on public blockchains. She has also urged Congress to speed up. But for now, as we see, instead of acceleration, it’s a slowdown.

The situation now resembles a classic Washington quagmire: an important bill that should create the much-needed regulation for a key element of the crypto market is mired in political disagreements, party games, and even potential conflicts of interest. At stake is not just the acronyms of the laws, but essentially the definition of how stablecoins will operate within the legal framework of the US, the world's largest economy. And this, believe me, fundamentally affects the entire global crypto industry and you as part of it.

What does this mean for the adoption of stablecoins and user trust in the future? The delay in establishing clear rules is undoubtedly a negative factor in the short term. Uncertainty deters conservative investors and large financial institutions. This could slow the integration of stablecoins into traditional finance. Users may see this as a sign that regulators cannot agree even on such seemingly obvious matters as stablecoins, which potentially undermines trust in the very efforts to create a stable and predictable crypto environment.

However, there is also the flip side. If this "rebellion" of the Democrats leads to the bill being refined and more stringent and clear rules on AML, oversight of foreign issuers, and consumer protection being truly added to it, then in the long term, this could, on the contrary, increase trust. The stablecoin market will become more transparent and safe. This will reduce the risks associated with the collapse of unsecured tokens or their use for illegal purposes, which ultimately should promote broader recognition and mass adoption of stablecoins as a reliable instrument both in the crypto world and beyond. For now, we must continue to observe this political theater and hope that reason and the desire for effective regulation will prevail over party battles. Washington has shown that crypto policy can be unpredictable, and this reminder is important to keep in mind.