In the turbulent cryptocurrency market of 2025, the legislative struggle in the U.S. Congress surrounding stablecoin regulation is evolving into a dramatic political tug-of-war. When the (Guiding and Establishing the National Innovation Act for U.S. Stablecoins) (GENIUS Act) failed in the Senate by a narrow margin of 48 votes in favor and 49 against, this legislative action, originally focused on financial regulation, had morphed into a battlefield of bipartisan power struggles and the Trump family's cryptocurrency interest chain. With less than two years until the 2026 midterm elections, the 'difficult birth' of this bill not only reveals the complex interplay between the U.S. political ecology and the digital asset industry but also leaves the future direction of U.S. stablecoin regulation shrouded in speculation.
I. The Bill's Debut Faces Setbacks: Conflicts of Interest Become a Fatal Trigger
On May 8, 2025, the first Senate vote on the GENIUS Act became a significant turning point in the history of U.S. cryptocurrency regulation. This bill, aimed at establishing a federal regulatory framework for stablecoins and granting the Federal Reserve supervisory authority, was originally seen as a crucial step for the U.S. to seize the initiative in digital financial regulation, but unexpectedly 'derailed' due to strong protests from Democratic lawmakers regarding potential conflicts of interest within the Trump administration.
The tense atmosphere at the voting site reflects the sharp opposition between the two parties on core issues. Democratic lawmakers collectively voted against the bill, citing the systemic corruption risks posed by the 'Trump family cryptocurrency empire'. Their fire was directed at the deep ties between the Trump family and the cryptocurrency platform World Liberty Financial—this platform's issued stablecoin USD1 not only plans to be used for settling a $2 billion investment in Binance, but also prominently lists Trump's three sons: Eric, Donald Jr., and Barron, among its 'Web3 ambassadors'. More controversially, Trump himself was exposed by the nonpartisan group 'National Democratic Defenders Action' to hold cryptocurrencies valued at $2.9 billion, accounting for 40% of his personal wealth, with a clear connection between the appreciation of these assets and various cryptocurrency policies promoted during his administration.
'The Republican bill is essentially giving the green light to Trump's private interests!' Democratic Congresswoman Maxine Waters's accusation is striking. She pointed out that the bill not only fails to restrict members of the Trump administration from participating in digital asset investments but also paves the way for his family's business empire by granting the executive branch the authority to formulate stablecoin rules. This concern over 'regulatory arbitrage' directly led 12 originally undecided Democratic lawmakers to switch sides, ultimately causing the bill to fall short of the 60 votes required to overcome the 'long debate threshold' by a single vote.
II. Escalation of Political Games: The Tug-of-War over Constitutional Powers and Regulatory Boundaries
After the voting defeat, supporters of the bill attempted to restart the process through a 'motion for reconsideration', but the disagreement between the two parties over 'whether to amend the bill to limit Trump’s interests' has evolved into a tug-of-war over constitutional powers. Majority Leader John Thune firmly stated on behalf of the Republicans: 'Congress has no authority to interfere with the private property rights of the president and his family; any provisions regarding asset divestment violate the spirit of the Constitution.' This position has received support from lobbying groups in the cryptocurrency industry—public data shows that during the 2024 election, industry-related political action committees have spent $131 million supporting candidates from both parties, many of whom are currently in key positions regarding the bill's deliberation.
The Democrats raised the banner of 'anti-corruption', attempting to elevate the topic to the level of political ethics. Senators Elizabeth Warren and Chris Van Hollen jointly called for the Trump administration to completely divest from USD1-related assets before the bill's passage, stating that this is a necessary measure 'to avoid the largest corruption scandal in White House history'. Their argument is based on a key fact: the stablecoin project by World Liberty Financial creates a closed loop with the Trump family's business interests—this platform not only issues meme coins under the 'TRUMP' brand but also sells exclusive meeting slots with the president to major holders, a model seen as a blatant challenge to the principle of separation of powers in the U.S.
In this power struggle, the countdown to the 2026 midterm elections has become an important variable. Over 60% of current lawmakers face reelection pressure, and political donations from the cryptocurrency industry are infiltrating both parties at an unprecedented rate. According to a public letter from the Cedar Innovation Foundation, if the bill continues to be delayed, the U.S. may fall behind the EU and Singapore in the global competition for stablecoins, and this 'regulatory lag risk' is forcing some centrist lawmakers to reassess their positions.
III. The Trump Family's Cryptocurrency Landscape: The Interest Network from Meme Coins to Stablecoins
As investigative reporting deepens, the Trump family's involvement in the cryptocurrency field gradually comes to light, outlining a complex web of interests. The 'TRUMP meme coin' launched in early 2025 can be considered the starting point of this capital game—this currency, backed by Trump's political image, saw its market value soar to $5 billion within three months through incentives like 'paid meet-and-greets' and 'exclusive policy briefings', with the Trump family directly profiting over $800 million by holding founding shares. This operation of monetizing political influence is viewed by regulators as a typical case of 'new corruption'.
The USD1 stablecoin project by World Liberty Financial is an upgraded version of this network. As a key hub connecting traditional finance and cryptocurrencies, USD1 has not only received investment from the Abu Dhabi Sovereign Fund but also plans to become a major settlement currency for leading exchanges like Binance. Trump's sons have joined as 'Web3 ambassadors', ostensibly to 'promote financial innovation', but in reality, they are deeply involved in platform operations through equity distribution and profit-sharing. This 'political-business amphibious' model has raised alarms among regulatory agencies—the U.S. Securities and Exchange Commission (SEC) has initiated an investigation into the platform, focusing on whether it uses political connections to evade regulatory scrutiny.
Even more noteworthy is that several policies promoted during the Trump administration have conveniently cleared obstacles for these business layouts. The (Digital Asset Taxation Simplification Act) passed in 2024 significantly reduced capital gains taxes on cryptocurrency transactions, while the provision in the GENIUS Act requiring 'stablecoin issuers to obtain federal licenses' effectively established entry barriers for 'politically connected projects' like USD1. This 'policy arbitrage' operation has led to profound doubts about the fairness of U.S. regulation.
IV. Industry Turmoil and Regulatory Deadlock: Interest Trade-offs Within a Time Window
The delay of the bill has had an immediate impact on the U.S. stablecoin market. Data shows that on the day of the voting defeat, the total market value of USD stablecoins shrank by 3.2%, with stocks of leading issuers like Circle and Tether dropping by over 5%. Liat Shetret from the blockchain analysis firm Elliptic pointed out: 'Regulatory uncertainty is undermining market confidence, and investors urgently need a clear regulatory framework.' However, the attitude of industry lobbying groups appears divided—while the Financial Innovation Association, representing traditional financial institutions, calls for 'immediate passage of the bill to stabilize the market', the Blockchain Association, composed mainly of cryptocurrency startups, supports 'resolving conflicts of interest before legislating', reflecting the internal divergence within the industry regarding regulatory priorities.
On the political front, both parties are engaged in subtle interest trade-offs. The Republicans understand that if they continue to ignore the Democrats' accusations of conflicts of interest, they may lose crucial swing state support in the 2026 elections; meanwhile, the Democrats also face pressure—overly entangling with the Trump family's business issues may distract voters from their economic policy propositions. This delicate balance has created space for a 'compromise version' of the bill: sources indicate that both sides are discussing 'additional clauses', such as requiring the president and his family to disclose all cryptocurrency holdings within six months after the bill takes effect, or establishing an independent regulatory committee to avoid executive interference.
The pressure of international competition has also become an important external factor driving legislation. The EU's (Markets in Crypto-Assets Regulation) (MiCA) has entered the implementation stage, and Singapore's Monetary Authority (MAS) recently launched a stablecoin regulatory sandbox. If the U.S. is unable to establish a unified regulatory framework, it may lead to the accelerated outflow of digital asset companies, shaking its leadership in global financial innovation. This urgency of 'regulatory competition' is forcing elites from both parties to reassess the costs and benefits of political games.
V. Future Outlook: Can Compromise Break the Deadlock?
As of May 12, the Senate has resumed deliberations on the GENIUS Act, indicating that a new round of voting may occur within days. Although Republicans insist on 'not modifying core provisions', political reality forces them to consider incorporating some Democratic demands. Analysts suggest that the most likely solution would be to add a 'regulatory transparency clause' to the bill, such as requiring all government officials and their families to regularly disclose their cryptocurrency holdings and establishing an independent review committee to oversee conflicts of interest. This 'procedural compromise' would preserve the core regulatory framework of the bill while partially addressing the Democrats' anti-corruption demands.
However, the fundamental contradiction remains unresolved: when the private interests of political figures intersect with national regulatory policies, can the U.S. legislative mechanism effectively separate the two? The Trump family's cryptocurrency empire is not just a case in point, but also reflects the deeply entrenched 'revolving door' phenomenon in the U.S. political system—where political and business elites seamlessly switch between power and capital, eroding the fairness and credibility of regulation.
For the global cryptocurrency market, the fate of the U.S. stablecoin bill is not only related to a country's regulatory choices but will also define the paradigm of rules in the digital financial era. If the two parties can find a balance between conflicts of interest and regulatory efficiency, the U.S. is expected to establish a regulatory benchmark that accommodates both innovation and stability; conversely, if political games continue to fester, it could lead to regulatory vacuums and market chaos, causing this once-thriving hub of financial innovation to miss critical opportunities.
In this war without gunpowder, every ballot hides a precise calculation of interests, and every debate recalibrates power. When the technological revolution of cryptocurrency collides with the political reality of the U.S., the difficulty of passing regulatory legislation may be the growing pains of an era's transformation—whether a breakthrough can be achieved ultimately depends on whether this country can find a true balance between capital interests and public welfare.