The GENIUS Act, as it is known, would create a regulatory framework for stablecoins pegged to the USD. The legislation advanced with bipartisan support in March, but has since lost Democratic support due to concerns about President Trump and his family’s business ventures involving crypto. In a 48 to 49 vote, the measure fell short of the 60 votes necessary to move forward.
The bill’s advancement out of the committee follows an Abu Dhabi-backed firm’s plans to support a Trump family-linked crypto firm, World Liberty Financial, by buying USD 2 billion worth of stablecoins and utilising them to invest in the crypto exchange Binance.
A representative of the Senate Banking Committee outlined some problematic areas within the latest iteration of the bill, including provisions that would undercut consumer protection laws. They also mentioned that the situation runs a risk of forcing taxpayers to pay for these risks.
At the moment of writing, there is no agreement between Democrats and Republicans ahead of the vote. A version of the bill that puts in place appropriate regulations on stablecoins could potentially get a majority of the chamber, with support on both sides.
A White House spokesperson told CBS News that Trump’s assets are in a trust managed by his children, and there are no conflicts of interest. They also mentioned that the bill should be passed on a bipartisan basis, and that the President of the US is dedicated to making the country the crypto capital of the world, innovating digital financial technology.
Meanwhile, the Senate Majority Leader urged Senate Democrats to vote in favour of moving forward with the legislation, mentioning that this is the sixth version of the legislation drafted with inputs from both parties and that changes can be further made after the bill goes through. They also noted that the GENIUS Act offers clarity for innovators amidst efforts to make the US a more prominent player in the industry, calling it the first step in bringing digital assets in the US by having a clear framework for stablecoins.
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