Senate Stablecoin Bill Gains Democratic Support After Amendments

Senator Ruben Gallego of Arizona has indicated that as many as 16 Democrats may support the Senate's stablecoin bill when it reaches its final vote. The "Guiding and Establishing National Innovation for U.S. Stablecoins of 2025" (GENIUS) Act faced significant opposition last month when Gallego led a group of Democrats against voting for cloture, citing concerns about consumer protection and other provisions. However, within a week and a half, Gallego and other Democrats who had initially opposed the bill changed their stance, and Gallego predicted that his colleagues would continue to advance it through the Senate.

Gallego emphasized that the bill has undergone significant changes and that Democrats have worked collaboratively with their Republican counterparts to address their concerns. He noted that the Republican team had adopted most of the amendments proposed by the Democrats, making the bill a "significantly different" product. Gallego led his colleagues in blocking the first cloture vote because he believed the initial version of the bill was not satisfactory and required more time to address the issues.

Gallego also mentioned that he had spent extensive time negotiating the language of the bill with other lawmakers. However, he accused the Republican team of attempting to push an unfinished version of the bill toward a vote on the Senate floor, describing it as a "power play." Despite this, Gallego expressed optimism that the bill would receive major bipartisan approval in its final vote, which he expects to occur next week.

Gallego also highlighted the importance of passing legislation to set up regulations for the structure of the wider crypto markets. He noted that while the stablecoin bill is likely to advance through Congress, there is limited time on the calendar to work through other bills, including budget legislation. Gallego suggested that an August deadline for passing both bills is optimistic and that completing the process early next year, before March, would be more feasible. He also expressed concern about the impact of the upcoming congressional elections on the legislative process.

Congressman French Hill, who chairs the House Financial Services Committee, agreed with Gallego on the importance of passing both the stablecoin bill and the market structure legislation. Hill warned that without these bills, traditional finance firms and the general public may be reluctant to engage with the digital assets sector due to a lack of regulatory clarity. He emphasized the need for both bills to pass Congress and be signed into law during this session to provide the necessary clarity for the industry.

Hill also noted that lawmakers from both parties and chambers still have a chance to move the bills by August if they cooperate with each other. However, there may be differences of opinion between the House and Senate on the market structure legislation. Representatives Bryan Steil of Wisconsin and Dusty Johnson of South Dakota also expressed their views on the legislative process, with Johnson suggesting that the House and Senate versions of the bills may not be identical and would require further negotiation.

The House Financial Services Committee is scheduled to hold a markup on the market structure bill next Tuesday. Gallego acknowledged that there is still a lot of work to be done and that stretching the process into the start of next year is still a viable option. He emphasized the importance of not rushing the process with an unsatisfactory product, as it could lead to a poor outcome. The crypto industry also needs to present a unified front when approaching lawmakers, according to Blockchain Association CEO Summer Mersinger, who called for the industry to speak with "one strong, loud voice" in Washington.