Howdy. Ed here.

Sixty votes. 

That’s what Senate Republicans need to muster on Thursday to move a landmark stablecoin bill a step closer to approval.

For weeks, this looked like a slam dunk. 

If there was one thing Republicans, Democrats, and the crypto industry agreed on, it was the need for a statutory framework to govern dollar-pegged cryptocurrencies, which now sport a market value of $246 billion.

But over the last week, the so-called Genius Act has been thrown into doubt.

Senate Democrats, urged on by minority leader Chuck Schumer, said they wanted big changes to the bill or they would vote against letting it move forward.

Moreover, three Republicans are wavering, too, according to an Axios report.

This means the GOP, which holds 53 seats in the Senate, probably needs to win over around 10 Democrats. 

Amid a flurry of meetings on Wednesday on Capitol Hill, it looks like Senator Tim Scott, the bill’s champion, is close to securing the votes. Still, Axios reported that Democrats may seek a delay of the so-called “cloture” vote, which would close debate and set the stage for passage. 

Passing legislation is messy. And the Genius Act got very messy in the last week or so as Democrats demanded that the bill address fundamental weaknesses they said Republicans had glossed over.

This won’t be the last crypto bill considered on Capitol Hill this year.

On Monday, Republicans in the House of Representatives introduced a “market structure” bill that will finally define which digital assets are commodities — DeFi — and which are not. 

This is a big deal because the Commodity Futures Trading Commission would become the designated regulator for Ethereum and its ilk, while centralised cryptocurrencies would fall under the purview of the Securities and Exchange Commission. 

But that process also got messy when Democrats stormed out of a hearing to protest what they called Donald Trump’s crypto “corruption.”

President Trump’s willingness to blur the line between his family’s rapidly expanding crypto ventures and policymaking has given Democrats a big target and made Republicans squirm. 

When World Liberty Financial, a purported DeFi project backed by Trump and his sons, launched its own stablecoin in March Democrats assailed the White House as well as Republican lawmakers for aiding and abetting a clear conflict of interest. 

Last week, Democratic senators who had voted for advancing the bill out of the Senate Banking Committee balked and signalled they were now prepared to vote against it. 

The group of nine Democrats led by Senator Ruben Gallego did not cite Trump in their statement of opposition. 

Rather, they said the bill posed a threat to national security by not doing enough to stop bad actors from utilising dollar-backed cryptocurrencies, nor did it provide adequate provisions against money laundering. 

Most poignantly, the bill, despite its name, would undermine “the safety and soundness of our financial system” by failing to set rules for how stablecoins would be integrated into banking and payments, the senators said.

Indeed, the American Bankers Association, the industry’s top trade group in Washington, expressed these concerns in a policy statement in March. The organisation said the new framework must direct stablecoin issuers to comply with regulations on reserves, redemption, capital and liquidity, risk management, and cybersecurity.

“The need to mitigate this financial stability risk is clear,” the ABA said. 

On Thursday, all eyes will be reading the fine print of how the bill has, or hasn’t, changed to accommodate bipartisan resistance. 

These details will shape whether the bill passes the next major test — Senate approval.

ICYMI

• Crypto faces ‘challenging summer’ if Washington wavers on legislation, says BitWise
  President Donald Trump has delivered on campaign promises for crypto policy during his first 100 days in office, but recent developments in Congress could stifle industry optimism and prevent crypto from reaching all-time highs this year, said Matt Hougan, chief investment officer for BitWise.

• Democrats storm out of hearing on crypto bill over Trump ‘corruption’
  A rift over US crypto policy deepened Tuesday as several Democratic lawmakers walked out of a joint hearing between the House Financial Services and Agriculture committees.

• Crypto bill hits snag as Senators baulk: ‘They want us to suck it up and vote for this’
  Landmark stablecoin legislation has hit a snag in the US Senate.

  Over the weekend, several pro-crypto Democrats said they were pulling support for the Genius Act, a stablecoin bill moving rapidly through the Senate.

Story of the Week

‘Open corruption’: Top US lawmaker decries Trump’s crypto conflicts

“It is open corruption.”

This is how US Representative Gerry Connolly characterised President Donald Trump’s deep ties to the crypto industry on Monday.

“The first 100 days of Donald Trump’s administration have been rife with conflicts of interest,” Connolly told DL News.

“Most notably around the Trump family’s creation of their own memecoins and the president’s special treatment of crypto industry players.”

“It is open corruption,” added Connolly, a Democratic congressman representing a northern Virginia district and the ranking member of the House Oversight Committee.

Comment of the Week

The US Senate’s stablecoin bill marks the first legislative test for the crypto industry, and it has led to intense partisan jockeying, especially with the Trump family’s expanding digital assets empire clouding the policy picture.

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

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