Senate Banking Committee Chairman Tim Scott blamed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act’s failure on partisan politics during a Senate speech on May 8.
Scott said the vote, which failed to reach cloture in the Senate, was expected to mark a step toward greater affordability and innovation. Instead, he said, political divisions took precedence.
“Instead, we witnessed a disappointing display of political gamesmanship that puts partisan politics above policy, and obstruction above innovation,“ Scott said.
The bill had previously undergone multiple amendments to address concerns raised by Democrats, including stricter requirements for stablecoin issuers and further provisions for Anti-Money Laundering.
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Scott criticizes last-minute opposition
Scott, a South Carolina Republican, said that “the GENIUS Act was a bipartisan achievement at the Banking Committee.” By working on it, he claimed those involved “made the decision to make America’s economy safer and cheaper for the American people.” Still, in his view, Democrats changed their minds when the “light and cameras were watching.”
Scott alleged that the shift was driven not by changes in the bill, but by efforts to deny President Donald Trump a legislative win:
“It was a vote against President Trump and President Trump’s legislative agenda. It was a vote to stop President Trump from having a victory in the digital asset space.“
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Democrats cite corruption concerns
Massachusetts Senator Elizabeth Warren, a leading voice on crypto regulation, raised concerns that the Trump family-linked stablecoin, USD1, surged in market value due to a “shady crypto deal with the United Arab Emirates.”
“The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption,“ she said.
On May 1, Abu Dhabi-based investment firm MGX used the Trump-linked stablecoin USD1 to settle a $2 billion investment in Binance. According to CoinMarketCap data, the stablecoin’s market cap shot up from under $137 million on May 1 to nearly $2.13 billion on May 2.
Democrats voiced concerns around Trump’s crypto-related activities and sponsored multiple bills to address those concerns. Four of the five pro-crypto Democrats who passed the GENIUS Act in the Senate Banking Committee signed their names to a statement on May 3, saying that they do not feel comfortable with the direction stablecoin legislation is taking.
While the letter did not mention Trump directly, Representative Maxine Waters was more explicit in her opposition.
“If there is no effort to block the President of the United States of America from owning his stablecoin business […] I will never be able to agree on supporting this bill, and I would ask other members not to be enablers,” Waters said.
Democrats propose stricter crypto laws
Democrats also recently sponsored the Modern Emoluments and Malfeasance Enforcement Act, or the MEME Act, to prevent federal officials from profiting from memecoins. US Senator Jeff Merkley and Senate Minority Leader Chuck Schumer also introduced the End Crypto Corruption Act earlier this week.
The End Crypto Corruption Act would ban the president, vice president, senior executive branch officials, members of Congress, and their immediate families from financially benefiting from issuing, endorsing or sponsoring crypto assets, such as memecoins and stablecoins.
In a statement published on Merkley’s website, he said that “people who wish to cultivate influence with the president can enrich him personally by buying cryptocurrency he owns or controls.”
“This is a profoundly corrupt scheme. It endangers our national security and erodes public trust in government. Let’s end this corruption immediately,” Merkley added.
In a statement to CBS News, Warren echoed that sentiment, saying that both Democrats in favor and opposed to the GENIUS Act “agree that green-lighting Donald Trump’s corrupt stablecoin deals is wrong.”
“The GENIUS Act will simply facilitate Trump’s crypto corruption,” Warren claimed.
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