Senate Crypto Bill Faces Democratic Pushback
Bipartisan talks stall over stablecoin regulation and Trump-linked crypto concerns
A key cryptocurrency bill in the U.S. Senate is facing unexpected turbulence as nine Democratic senators voice opposition to recent revisions, threatening one of Donald Trump’s top financial policy goals. The legislation, spearheaded by Sen. Bill Hagerty (R-Tenn.), seeks to establish the first federal regulatory framework for stablecoins—digital tokens pegged to the U.S. dollar.
While initial versions gained bipartisan traction, recent changes proposed by Republicans have drawn sharp criticism from Democrats who argue the bill weakens protections against money laundering and financial instability. Sen. Ruben Gallego, leading the Democratic dissent, stated the new draft “backpedaled on progress” and ignored Democratic input.
The dispute marks a significant moment for the crypto industry in Washington, which has gained influence following increased political contributions and Trump’s renewed push for crypto adoption. However, deep divisions remain within the Democratic caucus over whether digital assets pose more risk than reward.
Senate Minority Leader Chuck Schumer has advised Democrats to withhold support unless further changes are made. Citing foreign influence and national security risks—especially regarding firms like Tether—he emphasized the need for stronger safeguards. Additional concerns stem from reports that a Trump-affiliated firm is involved in a $2 billion stablecoin-funded deal backed by Abu Dhabi.
Despite the friction, some Democrats, including Sen. Kirsten Gillibrand, remain committed to refining the bill. She argues that clear, enforceable rules are the best defense against potential conflicts of interest involving Trump’s crypto ventures.
The stablecoin bill passed committee with support from five Democrats earlier this year, but the current version faces a difficult path to the Senate floor. Without their votes for cloture, the bill’s advancement remains uncertain.