The Senate advanced stablecoin legislation yesterday with a decisive 68-30 procedural vote supporting the GENIUS Act. This cloture vote limits further debate and sets up a potential final passage next week, particularly since approval of a key amendment suggests the current version represents the bill’s final form. However, attempts to attach the unrelated Credit Card Competition Act led to an abbreviated amendment process and blocked additional Democratic proposals regarding Trump’s cryptocurrency activities.
Eighteen Democrats voted in favor, with two Republicans standing against the bill.
Senator Tim Scott, Chair of the Senate Banking Committee said, “It’s a win for innovation because this framework will give entrepreneurs the confidence to build here in the United States of America, and not abroad.”
While there’s a bipartisan recognition of a need for stablecoin legislation, since the start of the current Trump administration there’s also been a push to progress stablecoins as a means to drive demand for US Treasury Bills. That was reiterated yesterday by the GENIUS Act sponsor Senator Bill Hagerty.
“Stablecoins also advance a vital national interest by driving demand for U.S. Treasuries,” he said. “A recent report forecasts that with a well-crafted U.S. regulatory framework, stablecoin issuers could become one of the top holders of U.S. Treasuries by the end of this decade – if not sooner. This would strengthen our fiscal position and cement the dollar’s status as the world’s reserve currency.”
This Treasury demand argument has gained traction, though research suggests the impact may be more nuanced. Research by the BIS has reinforced that stablecoins impact short term Treasury rates, but perhaps to a lesser extent than expected. Last week the Financial Stability Board warned of the potential impact of stablecoins on financial stability.
Some Democrats still oppose the bill
Despite bipartisan support for the procedural vote, opposition remains among some Democrats.
It’s unclear whether Senator Elizabeth Warren would support any stablecoin bill. Yesterday she objected to the lack of vote on some Democrat amendments. These include tightening rules on self-dealing by public officials and limitations on Big Tech stablecoins. There are provisions in the GENIUS Act for the Federal Reserve, FDIC and Treasury to review the issuance of stablecoins by large listed firms. Nonetheless, yesterday Senator Warren wrote to Meta to find out whether it is resurrecting plans to issue a stablecoin. It famously unveiled plans for a Libra stablecoin back in 2019 triggering a regulatory backlash and a wave of CBDC activity.
The Democrats voting in favor were: Alsobrooks, Booker, Cortez Masto, Fetterman, Gallego, Gillibrand, Hassan, Heinrich, Hickenlooper, Kelly, Kim, Lujan, Padilla, Rosen, Schiff, Slotkin, Warner, Warnock. Two republicans, Senators Hawley and Paul voted against the stablecoin bill.
