- Nine Senate Democrats now oppose the GOP-led stablecoin bill.
- Their statement cites gaps in AML, security, and consumer protections.
- The bill needs seven Democratic votes to advance.
For a moment, it looked like Democrats and Republicans in Washington might actually come together to get something productive done for crypto.
But just days before a key vote, that spirit of bipartisanship is cracking.
A group of nine Senate Democrats who previously supported the GOP-led GENIUS stablecoin bill now say they won’t back it in its current form, throwing the bill’s path forward into doubt.
In a joint statement released Saturday, the lawmakers said the legislation lacks sufficient safeguards on anti-money laundering, foreign issuer restrictions, and national security, and warned they “would be unable to vote for cloture” without further changes, according to Politico.
Among those reversing course is Arizona Senator Ruben Gallego, who just weeks ago voted to advance the bill out of committee. At the time, he called it a “step in the right direction,” though he also acknowledged it wasn’t perfect and would need further improvements.
Now, Gallego and his colleagues say too many issues remain unresolved.
“As stablecoins continue to grow in popularity, it is critical for Congress to work in a bipartisan fashion,” the senators wrote. “We recognize that the absence of regulation leaves consumers unprotected and vulnerable to predatory practices.”
The bill, officially known as the GENIUS Act, is spearheaded by Senator Bill Hagerty and aims to establish the first federal framework for payment stablecoins.
It would require stablecoins to be fully backed by liquid assets and prohibit issuers from engaging in lending.
The bill passed the Senate Banking Committee in March with bipartisan support, including votes from four of the Democrats now withholding support.
Their reversal comes amid growing Democratic unease over Trump-linked crypto ventures and potential conflicts of interest.
Hagerty responded by urging his colleagues to move forward in good faith.
“We have a choice here,” he tweeted. “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.”
At least seven Democratic votes would be needed to advance the bill.
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
