In a surprising turn of events, the U.S. Senate voted 48-49 against advancing the GENIUS Act, a pivotal bill aimed at establishing a regulatory framework for stablecoins. The vote, held on Thursday, fell short of the 60 votes needed to initiate formal debate, effectively stalling progress on what many viewed as a critical piece of crypto legislation.
Despite the bill’s earlier success in the Senate Banking Committee, where it garnered bipartisan support, a last-minute wave of Democratic opposition proved insurmountable. Lawmakers voiced concerns over the lack of safeguards against illicit financial activities, as well as the potential risks posed by foreign stablecoin issuers.
Adding to the controversy were allegations regarding President Donald Trump’s personal involvement with cryptocurrencies. Democratic senators cited Trump’s crypto affiliations, including his memecoin project and high-profile fundraising dinners, as factors that undermined the bill’s credibility.
Republican Defections and Political Manoeuvring
Notably, Senators Josh Hawley and Rand Paul broke ranks with their party by voting against the bill. In a strategic move, Senate Majority Leader John Thune also switched his vote at the last moment, a procedural tactic that enables the bill to be reconsidered in the future.
Sen. Ruben Gallego, a previous supporter who received $10 million from pro-crypto political action committees (PACs) in 2024, called for a pause to address flaws in the bill’s current draft. He emphasized the need to balance innovation with regulatory oversight, noting that the bill still has potential if properly revised.
Republicans Warn of Crypto Exodus
Despite the setback, several lawmakers stressed that the fight over the GENIUS Act is far from over. Sen. Mark Warner pointed out that the bill “isn’t yet finished”, suggesting that ongoing revisions could bring about a more balanced approach to protecting consumers while fostering innovation.
However, Republicans like Sen. Cynthia Lummis expressed frustration, warning that the decision could push crypto innovation overseas, where regulations may be more favorable. Sen. Bill Hagerty, who sponsored the bill, went further by declaring that the vote amounted to “killing the crypto industry here in America.”
What’s Next for the GENIUS Act?
The defeat does not necessarily mean the end for the GENIUS Act. With Senate Majority Leader Thune’s procedural maneuver, the bill can still be brought back for reconsideration. Some senators are already working on amendments to address the concerns raised, particularly around money laundering protections and stablecoin issuer accountability.
Crypto industry advocates remain hopeful, emphasizing that regulatory clarity is essential to maintaining the United States’ position as a global leader in blockchain technology. For now, the crypto community is left in limbo, awaiting the next move from Capitol Hill.
