Topline
Senators approved legislation Tuesday to regulate stablecoins, a major win for the crypto industry despite some bipartisan conflict-of-interest concerns related to President Donald Trump’s crypto ventures.
The bill passed the Senate on Tuesday evening. (Photo by Kevin Carter/Getty Images)
Key Facts
The Senate voted 68-30 to approve the “Guiding and Establishing National Innovation for U.S. Stablecoins,” known as the GENIUS Act, which would establish a regulatory framework for stablecoins, legitimizing their use for issuers and custodians.
The bill passed with bipartisan support and now heads to the House for a vote.
The bill appeared poised for passage headed into Tuesday’s vote after clearing a procedural hurdle last week in a 68-30 vote, with 18 Democrats breaking with their party to move the legislation forward.
It hit a brief roadblock last month when some Senate Democrats pulled their support after an Emirati-backed fund announced it would invest $2 billion in Binance using a stablecoin developed by the Trump family’s World Liberty Financial crypto firm.
Tangent
Some Senate Democrats wanted an amendment in the bill that would prevent the president and his family from profiting from stablecoins, but it was ultimately omitted from the final version of the bill. The legislation does include a provision, however, that would prevent members of Congress and their families from profiting off of stablecoins.
Chief Critics
Two Republican senators, Sen. Josh Hawley, R-Mo., and Sen. Rand Paul, R-Ky., opposed the bill in last week’s procedural vote. Paul opposes regulations for the industry in general, while Hawley has expressed concerns the legislation would be a “huge giveaway to Big Tech” and allow them “to issue stablecoins without any kind of controls.”
Key Background
The bill comes as Trump’s family businesses have deepened their involvement in crypto, among a multitude of ways for foreign investors and others who could seek a quid pro quo with the Trump administration could enrich him personally through his family business ventures. World Liberty, for example, has multiple foreign investors, The New York Times reported recently, noting that they would be prohibited from donating to Trump’s campaign under federal law. Sens. Elizabeth Warren, D-Mass. and Jeff Merkley, D-Ore., have asked the U.S. Office of Government Ethics to open a probe into the MGX-World Liberty deal, arguing that if it’s completed it “would represent a staggering conflict of interest, one that may violate the Constitution and open our government to a startling degree of foreign influence and the potential for a quid pro quo that could endanger national security.”
Further Reading
Key Crypto Bill Imperiled By Trump Crypto Firm’s Deal With Emirati State-Owned Fund (Forbes)
Trump Crypto Deals Provoke Senate Backlash and Calls for Investigation (New York Times)
Secret Deals, Foreign Investments, Presidential Policy Changes: The Rise of Trump’s Crypto Firm (New York Times)
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