GENIUS Act Faces Senate Vote Amid Democratic Opposition

The GENIUS Act, a proposed bill aimed at regulating stablecoins in the US, is set for a Senate vote today. However, its passage remains uncertain due to strong opposition from Democratic lawmakers.

Despite recent bipartisan amendments, the Senate Banking Committee's Democrats have expressed harsh criticism of the bill. A letter co-signed by 46 advocacy groups was circulated, highlighting significant concerns. These criticisms focus on several key issues, including the bill's alleged loopholes that could blur the lines between banking and commerce, and the lack of sufficient safeguards against crime and bad actors within the stablecoin ecosystem.

One of the main points of contention is the bill's treatment of Big Tech companies. The amendments would prevent publicly traded Big Tech firms from issuing stablecoins, but private companies, such as Elon Musk’s X, would not be subject to the same restrictions. This discrepancy has raised concerns about potential unfair business practices and legalized corruption.

Additionally, critics worry about consumer protection in the event of an issuer's collapse. Given that many prominent stablecoin issuers, including Tether, are not based in the US, there are fears that the GENIUS Act may not adequately protect users' assets.

Despite these criticisms, there is still a chance that the bill could pass. While the Senate Banking Committee and its allies have expressed strong opposition, other Democrats may hold a more favorable view. The outcome of the vote remains uncertain, and the crypto industry is closely watching the developments.

If the GENIUS Act does not pass, it could have significant implications for the crypto industry. According to crypto advocate John Deaton, if the bill fails, there may be no meaningful legislation involving crypto before the midterms. Historically, midterms have gone against the party in power, making it unlikely that more complex legislation, such as a Market Structures Bill, crypto-related tax legislation, or consumer protections, would be passed in the near future.

The next chance for the GENIUS Act will take place today as part of Senate proceedings that will begin at 3 PM EST. The crypto industry is strongly in favor of these regulations, with advocacy groups and business leaders both supporting the bill. However, the stiff Democratic opposition may pose a significant challenge to its passage.