A coalition of US Senate Democrats recognized for advocating the crypto sector have declared their intention to oppose a Republican-led stablecoin proposal if it progresses in its present form.
This action jeopardizes the advancement of legislation that could create the inaugural US regulatory structure for stablecoins, as noted in a May 3 article from Politico.
According to the article, nine Senate Democrats issued a collective statement stating that the bill “still has numerous matters that need to be resolved.” They cautioned that they would not back a procedural vote to further the legislation without amendments.
Among the endorsers were Senators Ruben Gallego, Mark Warner, Lisa Blunt Rochester, and Andy Kim — all of whom had previously supported the bill when it passed through the Senate Banking Committee in March.
The bill, put forth by Senator Bill Hagerty, is formally titled the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.
Related: Fed’s Powell reaffirms backing for stablecoin legislation
Senate prepares to vote on stablecoin bill
The Senate is anticipated to commence floor deliberation of the bill in the upcoming days, with the initial vote possibly occurring next week.
The bill has been promoted by the crypto sector as a significant progression toward regulatory transparency. However, the Democrats’ shift reflects increasing disquiet within the party.
Even though alterations were made to the bill after its committee endorsement to address Democratic reservations, the legislators claimed the modifications were inadequate. They called for more robust protections regarding Anti-Money Laundering, national security, foreign issuers, and accountability measures for noncompliant entities.
The statement was also endorsed by Senators Raphael Warnock, Catherine Cortez Masto, Ben Ray Luján, John Hickenlooper, and Adam Schiff.
Senator Kirsten Gillibrand and Senator Angela Alsobrooks were absent from the signatories, who co-sponsored the bill alongside Hagerty.
Despite their dissent, the Democratic senators highlighted their dedication to crafting responsible crypto regulation. They reportedly expressed their eagerness to continue collaborating with their colleagues to tackle these issues.
Related: US banks are ‘free to start supporting Bitcoin’
Crypto requires a stablecoin bill
On April 27, Caitlin Long, founder and CEO of Custodia Bank, criticized the US Federal Reserve for discreetly upholding a principal anti-crypto policy that advantages large-bank-issued stablecoins, despite easing crypto partnership regulations for banks.
Long elaborated that while the Fed recently revoked four prior crypto guidelines, a Jan. 27, 2023, statement remained effective in coordination with the Biden administration.
This guidance, according to Long, prevents banks from directly interacting with crypto assets and forbids them from issuing stablecoins on permissionless blockchains.
Nevertheless, Long noted that once a federal stablecoin bill is enacted, it could supersede the Fed’s position. “Congress should expedite the process,” she urged.
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