Senate Democrats are balking at advancing landmark stablecoin legislation due to President Donald Trump’s increasing personal benefits from his own crypto ties.
Over the weekend, Sen. Ruben Gallego, a Democrat elected to represent Arizona with $10 million in backing from crypto super PAC Fairshake, warned with eight of his colleagues that they would not vote to advance the current version of the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 (GENIUS Act), the Senate’s stablecoin bill. The Senate would need 60 votes to move forward with any legislation.
However, the bigger issue for the crypto industry may be the effect this new fight has on forthcoming market structure legislation. The stablecoin bill should ultimately still sail through Congress, one person who works with lawmakers and legislative aides told CoinDesk, but any slowing of ongoing momentum could threaten that bill, which in turn would likely delay any progress on market structure legislation intended to define how the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission are to oversee the industry. The market structure legislation — a bill the industry has demanded for years — would cover a much broader range of activities than just the stablecoin bill.
Two recent announcements in particular may have raised Democrats’ concern and led to this weekend’s announcement: Trump’s announcement of a dinner for the top holders of his memecoin and Abu Dhabi investment firm MGX’s announcement it would use the Trump family-backed World Liberty Financial’s USD1 stablecoin for an investment in Binance. Both suggest Trump himself may personally benefit to the tune of hundreds of millions of dollars, USA Today said.
Trump claimed he was not profiting from his crypto ventures during an interview with Meet the Press over the weekend.
“I’m not profiting from anything,” he said. “All I’m doing is, I started this long before the election. I want crypto. I think crypto’s important because if we don’t do it, China’s going to. And it’s new, it’s very popular, it’s very hot. If you look at the market, when the market went down, that stayed much stronger than other aspects of the market. But I want crypto because a lot of people, you know millions of people want it.”
While Gallego’s announcement was published over the weekend, Democrats have been concerned behind the scenes for a few days, with Sen. Chuck Schumer, the minority leader, warning Democrats to withhold support during a caucus meeting last week, CoinDesk confirmed. Axios first reported on this rift.
One of the individuals who spoke to CoinDesk said they were concerned about how long the fight over Trump’s involvement with crypto might drag out the legislative process for the stablecoin bill, what Democrats will need to be comfortable voting to advance the bill and whether or not the situation will prevent a market structure bill from advancing at all.
Gallego’s statement, which was co-signed by Democrats Mark Warner, Raphael Warnock, Lisa Blunt Rochester, Catherine Cortez Masto, Andy Kim, Ben Ray Luján, John Hickenlooper and Adam Schiff, said the lawmakers “recognize that the absence of regulation leaves consumers unprotected and vulnerable to predatory practices” and that there is a need for bipartisan legislation.
“However, the bill as it currently stands still has numerous issues that must be addressed, including adding stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system and accountability for those who don’t meet the act’s requirements,” the statement said.
Gallego, Warner, Kim and Blunt Rochester had previously joined Republicans in voting to advance the bill out of the Senate Banking Committee.
Sen. Elizabeth Warren, who leads the Democrats on the Senate Banking Committee, was far more blunt in a post on social media site Bluesky, saying the Senate should not pass a bill that would “facilitate this kind of corruption,” referring to MGX’s announcement — shared publicly by Eric Trump, one of the president’s sons — last week.
“The Trump family stablecoin surged to 7th largest in the world because of a shady crypto deal with the United Arab Emirates — a foreign government that will give them a crazy amount of money,” she said.
She wrote a joint letter with fellow Democrat Jeffrey Merkley to the acting director of the U.S. Office of Government Ethics asking his office to investigate the MGX deal on Monday.
The stalling momentum isn’t limited to the Senate. Earlier Monday, Rep. Maxine Waters, the leading Dem on the House Financial Services Committee, told the committee’s chair she would block efforts to hold a joint hearing with the House Agriculture Committee addressing market structure issues.
“Most of this is politics,” wrote Jaret Seiberg, a financial-policy analyst with TD Cowen, in a Monday note to clients. He said that Trump’s personal stake in crypto is making it hard for Democrats to back the stablecoin bill that would regulate his family’s business. Even so, he predicted it’ll still pass the Senate, though maybe not this week.
“The crypto lobby is politically powerful and has shown a willingness to devote its considerable resources to influencing Washington,” Seiberg said. “It is hard for us to see why the Democrats would take on that fight when they can leverage significant concessions from the GOP on the stablecoin bill.”
Lobbyists for the crypto industry seem alarmed about the last few days’ announcements: A joint statement published Monday urged lawmakers to begin floor debate on the bill.
The statement, signed by Blockchain Association’s outgoing CEO Kristin Smith, the Crypto Council for Innovation’s acting CEO Ji Kim and the Digital Chamber’s new CEO Cody Carbone, said a real regulatory framework would support stablecoin adoption and “dollar dominance in the digital economy.”
“We respectfully urge Senators to vote YES on the motion to proceed to consideration of the GENIUS Act, and move us one step closer to enacting a bipartisan stablecoin framework,” the statement said.
Another lobbying organization, the National Venture Capital Association, also weighed in with a statement attributed to CEO Bobby Franklin asking the Senate to move the stablecoin bill forward.
“U.S. leadership in the digital economy depends on establishing a clear and consistent regulatory framework for stablecoins that fosters innovation, empowers entrepreneurs and helps build the next generation of financial technologies,” the statement said. “A strong stablecoin framework will also support the venture capital industry’s efforts to back groundbreaking companies and strengthen America’s global financial technology leadership.”
