Senate Fails to Advance GENIUS Act, Delaying Stablecoin Regulation

The U.S. Senate's failure to advance the GENIUS Act, officially known as the Guiding and Establishing National Innovation for US Stablecoins of 2025 Act, has drawn criticism from Treasury Secretary Scott Bessent. The bill, which aimed to provide a stable federal framework for payment-focused stablecoins, did not pass a procedural vote on May 8 due to the withdrawal of support from several Democratic senators. These senators cited concerns over the bill's language, timing, and potential national security and anti-money laundering (AML) issues.

Bessent, who is active on social media, described the bill as a "once-in-a-generation opportunity" to strengthen the dollar's dominance and promote U.S. leadership in financial innovation. He expressed disappointment that the Senate missed the chance to provide global leadership in digital finance by failing to advance the GENIUS Act.

Senator Mark Warner of Virginia was among those who opposed the bill, stating that he could not support an incomplete piece of legislation. The revised bill included tighter compliance measures and better safeguards for stablecoin issuers, but these changes were not sufficient to garner Democratic backing. Some lawmakers also expressed concern that President Donald Trump's recent endorsements of cryptocurrency added political baggage to the bill, potentially compromising its neutrality.

The GENIUS Act was introduced by Senator Bill Hagerty and co-sponsored by Senators Tim Scott, Kirsten Gillibrand, Cynthia Lummis, and Angela Alsobrooks. Despite efforts to find agreement, the bill did not receive enough votes to end debate and proceed to a full vote. Senator Lummis shared her disappointment via social media, calling the bill an important bipartisan step for stablecoin payment clarity. Senate Majority Leader John Thune also expressed frustration, stating that Democratic input was included throughout the process.

Despite this setback, industry figures and lawmakers indicate that efforts to regulate digital assets will continue. Coinbase CEO Brian Armstrong noted that crypto legislation remains a priority and anticipates further initiatives in the near future. The push for crypto regulation is expected to go on, with stakeholders hoping to find a way forward in the coming months.