Once again postponed, when will the regulation of US stablecoins see the light of day?

Written by: Monika Ghosh

Compiled by: Oliver, Mars Finance

Nine Democratic senators announced that they would withdraw their support for the landmark U.S. stablecoin legislation unless the bill is amended.

In a joint statement released on May 3, the senators pointed out that the current version of the stablecoin bill (the "Guidance and Establishing the American Stablecoin Innovation Act" or GENIUS Act) has some issues. The senators stated:

"Although we are eager to continue working with colleagues to address these issues, we will not be able to vote in favor of ending the debate if the current version of the bill is submitted to Parliament."

The statement was signed by Senator Raphael Warnock (, Catherine Cortez Masto ), Ben Ray Luján (, John Hickenlooper ), and Adam Schiff (. Surprisingly, Senator Ruben Gallego ), Mark Warner (, Lisa Blunt Rochester ), and Andy Kim ( are also among the signatories, despite having expressed support when the bill passed through the Senate Banking Committee in March.

However, it is worth noting that the two Democratic senators who co-sponsored the "GENIUS Act" with the main sponsor, Republican Senator Bill Hagerty )Bill Hagerty(, Kirsten Gillibrand )Kirsten Gillibrand( and Angela Alsobrooks )Angela Alsobrooks(, did not sign the statement.

Senate Democrats hope the GENIUS Act will strengthen regulation.

Senate Democrats stated in a statement that "Congress must establish clear rules and guidelines for stablecoins in a bipartisan manner." They expressed that the lack of such regulation would leave consumers "unprotected and vulnerable to attacks."

However, unless the bill is amended, they are determined not to support it. They added:

"We approach this process with a constructive and open mindset, and understand that further improvements will be made to this bill."

Senate Democrats believe that the GENUIS Act needs to "establish stronger provisions regarding anti-money laundering, foreign issuers, national security, maintaining the safety and soundness of the financial system, and holding accountable those who do not meet the requirements of the Act."

It is worth noting that these nine Democratic senators are not the only ones opposing the bill. One of the bill's most vocal critics, Senator Elizabeth Warren, warned that the bill could "open the door for large tech companies and other corporate groups to issue their own stablecoins."

In a letter last month, 20 community banking organizations also expressed opposition, believing that the bill could replace traditional deposits and expose the financial system to new vulnerabilities.

About the GENIUS Act

Hagerty is the drafter of the "GENIUS Act", which he proposed on February 4, 2025. The bill aims to provide a regulatory framework for payment stablecoins in the United States. Therefore, the passage of the "GENIUS Act" will be the first step for the United States to establish a comprehensive cryptocurrency regulatory system.

According to the proposed GENIUS Act, stablecoin issuers must ensure that each issued token is backed 1:1 by US dollars, insured bank deposits, or short-term Treasury bills. Stablecoin issuers may also choose to accept federal regulation from the Office of the Comptroller of the Currency (OCC) or state-level regulation.

The Senate Banking Committee passed the GENIUS Act in March with a vote of 18 in favor and 6 against. According to Politico, Republicans have since made amendments to the bill in hopes of winning Democratic support. In fact, many of the amendments are related to the issues raised by Senate Democrats in a statement on Saturday.

Republicans are confident that the bill will gain bipartisan support, so much so that Senate Majority Leader John Thune formally proposed to expedite the bill's consideration earlier this week. Senate Republicans originally hoped to push for a full vote on the GENIUS Act before the end of May.

According to Politico, the first procedural vote on the bill is expected to take place as early as next week. However, the statement from Senate Democrats may hinder the plans of Republicans while also giving them more leverage to force further concessions.

The bill requires the support of at least seven Democrats to pass in the Senate.

Senator Hagerty responds to the Democratic Party's statement

Hagerty stated in response to the statement from Senate Democrats that the U.S. should now advance legislation to ensure its leadership position in the digital asset space and to protect the dollar for the coming centuries. He added:

"We are faced with a choice. Either we move forward and make any necessary changes through bipartisan cooperation, or we indicate that legislation on digital assets and cryptocurrencies remains a topic unique to the Republican Party."