Nine Democratic Senators Oppose Current GENIUS Act, Demand Stricter Provisions
2min read The crypto industry has recently encountered legislative hurdles that have slowed down its progress. Nine Democratic senators, including Digital Assets Subcommittee ranking member Ruben Gallego, have expressed their intention not to support the current version of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.
These senators have called for stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of the financial system, and accountability for those who do not meet the act’s requirements. This development has sparked significant discussion within the crypto community, especially considering that the Senate Banking Committee advanced the bipartisan bill out of committee in March with an 18-6 vote that included five Democrats.
Alex Thorn, the research head at Galaxy Digital, acknowledged that an updated draft of the bill was released on May 1. He argues that nearly all the changes made in recent weeks “make the bill stricter on stablecoin issuers when compared to the version the Senate Banking Committee voted on.” Thorn’s note essentially endorses the GENIUS Act, explaining that the crypto industry “both gets a viable pathway while also being reigned in, it protects the financial system, and it helps America succeed geopolitically and in the shifting global economy.”
Amanda Fischer, the policy director at Better Markets and an ex-SEC chief of staff, sees the situation differently. She believes that the bill needs more work to ensure that it adequately protects consumers and the financial system.
Christopher Perkins, the president of CoinFund, called for a focus on doing what is right for the industry, rather than getting bogged down in politics.
The CEOs of the Blockchain Association, Crypto Council for Innovation, and the Digital Chamber also weighed in, expressing gratitude for the significant strides the GENIUS Act has already made. They urged the Senate to bring the bill to the floor for debate this week, hoping to see meaningful refinements to further ensure US leadership in digital finance.
Meanwhile, Arizona governor Katie Hobbs vetoed a bill that would have allowed the state treasurer and retirement system to invest up to 10% of public funds in “virtual currency” like bitcoin. Hobbs wrote in a letter to Senate President Warren Petersen: “Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.”
This legislative slowdown has raised questions about the timeline for when this legislation could see the light of day. The Democratic senators did note in their GENIUS Act statement: “We recognize that the absence of regulation leaves consumers unprotected and vulnerable to predatory practices.”
Despite these setbacks, the crypto industry remains optimistic that progress will be made eventually. The industry is hopeful that the GENIUS Act will be refined and passed, ensuring US leadership in digital finance while protecting consumers and the financial system.
