- Nine Democratic senators now oppose the Republican-led stablecoin bill
- Their joint statement points out defects in anti-money laundering, safety, and consumer protection provisions
- The bill's advancement requires at least seven Democratic votes in favor
Democratic and Republican lawmakers in Washington had once shown signs of substantial cooperation on cryptocurrency issues.
However, this bipartisan spirit is now showing cracks on the eve of a key vote.
Nine Democratic senators who previously supported the Republican-led GENIUS Stablecoin Act have suddenly stated they will oppose the current version of the bill, throwing the legislative process into uncertainty.
According to Politico, these lawmakers noted in a joint statement released on Saturday that the bill has regulatory gaps in anti-money laundering measures, foreign issuer restrictions, and national security, warning that "without further modifications, they cannot vote to end debate".
Those changing their stance include Arizona Senator Ruben Gallego, who just weeks ago voted to support the bill's committee review. At the time, he called the bill "a step in the right direction" but acknowledged room for improvement.
Now Gallego and his colleagues believe the bill still has numerous unresolved issues. The senators wrote: "As stablecoins become increasingly prevalent, Congress must advance legislation in a bipartisan manner. We recognize that regulatory gaps will expose consumers to predatory business practices."
The GENIUS Act, led by Senator Bill Hagerty, aims to establish the first federal-level payment stablecoin regulatory framework, requiring stablecoins to be fully backed by liquid assets and prohibiting issuers from engaging in lending activities.
The bill passed with bipartisan support in the Senate Banking Committee in March, with four Democrats who initially voted in favor now withdrawing their support. Concerns within the Democratic Party about Trump-related crypto enterprises and potential conflicts of interest are intensifying.
Hagerty responded by urging colleagues to pursue legislation in good faith: "We face a choice: to improve the bill through bipartisan cooperation, or continue to have digital asset legislation seen as a Republican-exclusive issue."
The bill's final passage requires securing at least seven Democratic votes in support.
