Stablecoin Regulation Bill Fails Senate Vote 48-49

The U.S. Senate's attempt to advance legislation aimed at regulating stablecoins faced a significant setback on Thursday. The bill, which sought to establish a regulatory framework for stablecoins such as Circle's USDC and Tether's USDT, failed to secure the necessary votes to proceed to a debate phase. This development marks a delay in the legislative process, which has been closely watched by the crypto industry.

The vote to advance the legislation into days of floor debate next week failed with a tally of 48-49. Under Senate rules, 60 votes were required to move the debate forward. Notably, Senators Josh Hawley and Rand Paul, both Republicans, voted against advancing the legislation, along with Senate Majority Leader John Thune, who flipped his vote to no in a procedural move to potentially bring the legislation back at a future date.

The delay in advancing the bill comes amid growing concerns from some Democrats about the potential for illicit behavior within the stablecoin regime. These concerns were exacerbated by the crypto business ties of President Donald Trump, which many Democrats flagged as a potential conflict of interest and a form of corruption. Senator Ruben Gallego, who received significant backing from the crypto industry's political action committees during the 2024 election, was among those who turned against the bill in recent days.

Gallego, speaking on the Senate floor before the vote, acknowledged the potential for a bipartisan win but called for a pause in the legislative process. He emphasized the need for more time to ensure that the bill provides adequate safeguards and protections for Americans. "The reason you're hearing some hesitancy: The legislation of this scope and importance really cannot be rushed, and we need time," he said, adding that he is not seeking to shut down the process but rather to ensure that it is done correctly.

Senator Mark Warner, a Virginia Democrat, echoed similar sentiments, noting that while stablecoins are an undeniable part of the future of finance, the current text of the bill is not yet finalized and needs to provide more protections for Americans. Republicans, including Majority Leader John Thune, have encouraged the Senate to press forward to an open debate, where changes could still be made.

Senator Cynthia Lummis, a Wyoming Republican who leads a crypto subcommittee in the Senate, emphasized the hard work that has gone into the bill and the many amendments that have already been taken from Democrats. She urged the Senate to continue working on the legislation, stating that "we must grab the reins and ensure that all Americans are able to take charge of their financial future." Senator Bill Hagerty, who introduced the bill, went further, arguing that lawmakers voting against opening debate were effectively voting to "kill the crypto industry here in America."