The U.S. Senate has failed to move forward with the GENIUS Act, a key bill aimed at regulating stablecoins. The legislation once had rare bipartisan support. But it collapsed when Democratic senators backed away, citing concerns over Donald Trump’s growing crypto influence. At the center of the storm: a stablecoin called USD1, tied to Trump-linked World Liberty Financial.
Democrats claim the bill lacked basic protections. They raised red flags about money laundering, foreign investment, and political corruption. Senator Elizabeth Warren led the charge, accusing Trump of trying to profit from U.S. crypto policy. Republicans fired back, calling it a political hit job. Now, with only 49 votes in favor, the bill is dead—for now.
Stablecoin Regulation Takes a Political Hit
Stablecoins are digital tokens tied to real-world assets like the U.S. dollar. They promise stability in an otherwise volatile crypto world. The GENIUS Act was supposed to create a national framework for these assets. Instead, it exposed how fragile bipartisan trust is when Trump is involved.
Republican senators say Democrats pulled support just to deny Trump a legislative win. Senator Tim Scott accused them of letting “Trump Derangement Syndrome” kill progress. But Democrats insist they want stronger safeguards first. They’re pushing for rules to prevent public officials from owning or promoting stablecoins. Without these changes, they won’t budge.
Stablecoin Bill Sinks as GENIUS Act Hits Senate Wall
The GENIUS Act was expected to reach a final vote by May 26. That’s now off the table. Senate Majority Leader John Thune says he’ll try again next week, but chances look slim. With deep mistrust on both sides, reviving the bill may require starting over.
Some lawmakers still hope for a deal. Senator Mark Warner says he’ll keep negotiating. But others say the damage is done. The bill’s collapse is a major blow to the crypto industry, which had hoped for clear stablecoin rules this year. Instead, they got more political chaos.
Trump’s Crypto Ties Spark Backlash
Trump’s fingerprints are all over the crypto space now. He launched a meme coin earlier this year that generated over $320 million in fees. He’s also promoting a May 22 dinner event for coin holders. Then came USD1, the stablecoin launched by World Liberty Financial—a firm with ties to Trump’s family.
USD1 recently secured a $2 billion investment from the UAE to buy into Binance. That set off alarm bells among Democrats, who see foreign cash mixing with U.S. policy. They say Trump is cashing in on influence. And unless Congress acts, more of the same could follow.
What’s Next for Crypto in the Senate?
This was supposed to be crypto’s big year on Capitol Hill. Instead, the GENIUS Act’s failure shows how toxic the politics have become. The fight over stablecoin regulation is no longer just about finance. It’s now tied up with Trump’s political comeback and the 2024 election season.
Crypto advocates are watching closely. Without a legal framework, the stablecoin market remains a gray zone. And until both parties can agree—on Trump and on transparency—regulation will remain just out of reach.
