Senate Poised to Regulate Crypto Stablecoins Amid Trump’s Financial Ties
Legislation on the Horizon
The Senate is likely to approve a bill regulating stablecoins, a type of cryptocurrency, marking a key step in the digital asset industry’s push for legitimacy. This legislation, the first of many expected crypto-related bills, seeks to reassure consumers and could reshape the financial landscape.
This fast-tracked bill, which will go to the House, comes after the crypto industry spent significantly on political campaigns. The industry seeks greater influence in Washington and elsewhere. Eighteen Democratic senators have endorsed the measure, aligning with the Republican majority in the Senate. This follows the “Laken Riley Act” on immigration enforcement earlier this year.
However, many Democrats are against the bill, voicing concerns about how it addresses Donald Trump’s financial interests in the crypto sphere.
“We weren’t able to include certainly everything we would have wanted, but it was a good bipartisan effort,”
—Angela Alsobrooks, D-Md.
The GENIUS Act
The “GENIUS Act” plans to establish consumer protections and guardrails for stablecoins, which are usually pegged to the U.S. dollar. The acronym stands for “Guiding and Establishing National Innovation for U.S. Stablecoins.”
The bill is expected to pass Tuesday because it needs only a simple majority vote, having cleared a major procedural hurdle last week. But the bill has faced stiffer resistance than expected.
Notably, the bill bans members of Congress and their families from profiting from stablecoins. However, it doesn’t extend to the president and his family, even as Trump is developing a crypto enterprise from the White House.
Last month, the Republican president held a private dinner at his golf club in Virginia with leading investors in a Trump-branded meme coin. The Trump family has a large stake in a crypto project, World Liberty Financial, which introduced its own stablecoin, USD1. Data from the Financial Crimes Enforcement Network (FinCEN) shows a significant rise in stablecoin transactions in recent years, with trading volume reaching nearly $2 trillion in 2023 (FinCEN 2024).
Industry Influence and Bipartisan Support
The Trump administration is broadly supportive of crypto’s growth and its integration into the economy. Last week, Treasury Secretary Scott Bessent said the legislation could push the U.S. stablecoin market beyond $2 trillion by the close of 2028.
Brian Armstrong, CEO of Coinbase, the largest crypto exchange, has met with Trump and applauded his early actions on crypto. Coinbase sponsored a parade in Washington for the Army’s 250th anniversary, coinciding with Trump’s birthday.
The crypto industry highlights the bipartisan nature of its legislative efforts, with support from both sides. “The GENIUS Act will be the most significant digital assets legislation ever to pass the U.S. Senate,” said Senate Banking Committee Chair Tim Scott, R-S.C., before a vote last week. “It’s the product of months of bipartisan work.”
In early May, some Senate Democrats who initially backed the bill reversed their support, prompting fresh negotiations among Senate Republicans, Democrats, and the White House, resulting in the compromise expected to pass Tuesday.
“many, many changes” were made during negotiations and that “it’s a much better deal because we were all at the table.”
—Alsobrooks
Cynthia Lummis, GOP Wyoming Sen., said that she is “okay” with the stablecoin legislation after negotiations. However, the bill still leaves unresolved concerns regarding conflicts of interest, causing tension among Democrats.
Elizabeth Warren, D-Mass., the ranking member on the Senate Banking Committee, warned the bill creates a “super highway” for Trump corruption. She has also warned that the bill would enable significant tech firms, such as Amazon and Meta, to launch their own stablecoins.
If the stablecoin bill passes the Senate, it must still pass the House, where lawmakers might try to include a broader market structure bill, potentially complicating passage through the Senate. Trump wants the legislation on his desk before the August recess, less than 50 days away.