GM, Aleks here.

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.

“We realize that the absence of regulation leaves consumers unprotected and vulnerable to predatory practices,” nine senators wrote in a statement on Saturday.

“However, the bill as it currently stands still has numerous issues that must be addressed.”

The Democrats are seeking tougher rules regarding anti-money laundering, foreign issuers, and potential risks to national security and the stability of the financial system.

Notably, four of those Democrats — Ruben Gallego, of Arizona; Mark Warner, of Virginia; Andy Kim, of New Jersey; and Lisa Blunt Rochester, of Delaware — had voted to advance the bill out of the banking committee in March.

A bipartisan committee vote would boost the odds that members of both parties collaborate when the Genius Act and other crypto bills come before the entire Senate, Warner said at the time.

Several Democrats appear to feel their earlier support was for nothing.

“This isn’t some reversal out of nowhere by Dems,” Gallego wrote on X, adding that he’s spent weeks negotiating with his Republican colleagues.

“The bill that was introduced for floor consideration back-pedaled on a lot of the progress we made and did not include other improvements we sought. It seems they want us to suck it up and vote for this bill without our input.”

To be sure, Republicans haven’t lost all Democratic support. New York’s Kirsten Gillibrand and Maryland’s Angela Alsobrooks are co-sponsors, and they were not among the nine Democrats who put their name to Saturday’s statement.

But Republicans have a narrow 53-47 majority in the Senate, where the dreaded filibuster means most bills fail to pass without a 60-vote supermajority.

Politico reported Republicans were “stunned” by the Democrats’ reversal but remain hopeful they can win back their support.

Senator Bill Hagerty, a Republican from Tennessee, urged wavering colleagues to reconsider their position.

“We have a choice here,” he wrote on X. “Move forward and make any remaining changes needed in a bipartisan way, or show that digital asset and crypto legislation remains a solely Republican issue.”

President Donald Trump and Republican lawmakers have pledged to advance two significant pieces of crypto legislation this year: one addressing stablecoin issuance and the other addressing crypto market structure.

In addition to the Senate’s Genius Act, Republicans in the House of Representatives are pushing their own bill called the Stable Act that addresses dollar-pegged tokens.

ICYMI

• Celsius ex-boss Alex Mashinsky says he’s no SBF in bid for light sentence
  Alex Mashinsky, the founder of bankrupt crypto lender Celsius, will be sentenced this week. He’s pleaded guilty to two counts of fraud, but his lawyers and prosecutors continue to argue over the depth of his deceptions.

• Tornado Cash prevails in court as judge bars new sanctions
  Tornado Cash cannot be re-sanctioned by the US government, a federal judge ruled this week. The decision ends a long-running lawsuit filed by Ethereum developer Preston Van Loon and five other Tornado Cash users.

• Solana coalition pitches SEC on tokenisation pilot as market seen topping $19tn
  In a letter filed with the Securities and Exchange Commission on Tuesday, the Solana Policy Institute and Superstate, a New York tokenisation firm, proposed an 18-month trial program to experiment with issuing and trading tokenised versions of securities.

Story of the Week

Crypto experts score Trump’s first 100 days: ‘More symbolic than substantial’

Donald Trump’s presidency has proven chaotic for crypto.

More than 100 days into his second term, some crypto rules have been relaxed. But the White House’s trade war has seen the global cryptocurrency market’s value drop by almost 21%, or about $800 billion, since its December high.

Trump seems to have kept most of his crypto pledges. But some market watchers are dissatisfied.

“So far, many of the campaign promises appear to be more symbolic than substantial,” Jonathan Dixon, head of surveillance at regtech firm eflow Global, told DL News.

Comment of the Week

The UK’s sweeping new crypto regulations subject firms to the same burdens as investment companies. That’s likely to favor companies that already operate in heavily regulated environments, and challenge lean, crypto-native startups.

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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