Senate Set to Approve Stubcoin Regulation
WASHINGTON (AP) — The Senate seems ready to pass a bill regulating stubcoin, a specific type of cryptocurrency, this Tuesday.
The legislation is moving quickly to the House for potential amendments, particularly in light of the 2024 campaign season when the crypto sector has become one of the top political contributors. Its influence seems to be growing in Washington and beyond.
With 18 Democrats showing support, the bill is poised to advance alongside the Republican majority, which stands at 53-47 in the Senate. If approved, it would mark the second significant bipartisan legislation to pass through the Senate this year, following the Raiken Riley Law on immigration enforcement introduced in January.
However, many Democrats are against the measure, expressing worries that it doesn’t adequately address President Trump’s personal economic interests in cryptocurrency.
“We certainly couldn’t include everything we would have wanted, but it was a good bipartisan effort,” said Sen. Angela on Monday. She noted, “This is a regulated, yet unregulated area.”
The bill, considered by some to be a stroke of genius, aims to set boundaries and consumer protections for stubcoin, which is typically pegged to the US dollar. The full title is “Guidelines and Establishment of National Innovation for Stablecoins.”
It’s expected to pass on Tuesday since it requires only a simple majority and has already overcome significant procedural challenges, garnering a 68-30 vote last week. Yet, it faces more opposition than initially anticipated.
The legislation includes a provision that bars Congress members and their families from benefiting from stablecoins. However, curiously, this restriction doesn’t apply to the president and his family, meaning Trump’s potential crypto ventures could remain untouched.
Trump hosted a private dinner at a golf club recently. Notably, his family has substantial investments in World Liberty Financial, a crypto initiative that presents yet another opportunity for investors to enrich the president’s relatives. This project has also launched its own stablecoin, USD1.
The administration broadly supports the growth of cryptocurrency in the economy. Treasury Secretary Scott Becent stated last week that the law could boost the US stubcoin market by over $200 trillion by 2028.
Coinbase CEO Brian Armstrong, a primary advocate of the bill from the largest crypto exchange, met with Trump and commended his initial actions related to cryptocurrency. Over the weekend, Coinbase, a notable name in the industry, sponsored a parade celebrating the Army’s 250th anniversary in Washington—an event that coincidentally aligned with Trump’s 79th birthday.
The crypto community views legislative efforts as bipartisan, noting that supporters exist on both sides of the aisle.
“The Genius Act will be the most important digital asset law ever to pass the US Senate,” asserted Senate Banking Committee Chairman Tim Scott last week, just before a significant vote. “It’s the result of months of bipartisan collaboration.”
The bill encountered difficulties in early May when Senate Democrats voted against it, halting its progress and prompting new negotiations. Eventually, a compromise was reached involving Senate Republicans, Democrats, and the White House, paving the way for the anticipated vote on Tuesday.
“There were a lot of changes, and in the end, it’s a much better deal because we were all at the table,” Brooks noted.
Yet, the bill still leaves unresolved conflicts regarding the president’s interests, which continue to create friction among Democrats.
Sen. Elizabeth Warren from Massachusetts, a vocal leader on the Senate Banking Committee, has cautioned that the bill could create a “superhighway” for Trump’s possible corruption. She also warns that it might enable major tech firms like Amazon and Meta to release their own stablecoins.
If the Senate passes the stablecoin law on Tuesday, further challenges lie ahead before it can reach the president. Republicans hold a slim majority in the House, where lawmakers may try to attach a wider market structure bill.
Trump has expressed his desire to have stable laws on his desk before Congress breaks for a nearly 50-day recess in August.
