Democrats Crack, Throwing GENIUS Stablecoin Bill into Doubt

But just days before a key vote, that spirit of bipartisanship is cracking.

A bipartisan bill to create a federal framework for payment stablecoins may not get a vote this week after all, as a group of nine Senate Democrats said they won't support the legislation in its current form.

The GOP-led GENIUS Act was previously expected to come up for a vote this week, but the nine Democrats, including Arizona Senator Ruben Gallego and Ohio Senator Sherrod Brown, said in a joint statement Saturday that they would be unable to vote for cloture—the procedural motion to limit debate—on the bill unless it is amended further.

"We would be unable to vote for cloture on the legislation in its current form," the lawmakers said. "This legislation lacks sufficient safeguards on anti-money laundering, foreign issuer restrictions, and national security."

The lawmakers' statement throws the bill's path forward into doubt. At least seven Democratic votes would be needed to advance the bill, which is being spearheaded by Senator Bill Hagerty and aims to establish the first federal framework for payment stablecoins.

The bill, which passed the Senate Banking Committee in March with bipartisan support, would require stablecoins to be fully backed by liquid assets and prohibit issuers from engaging in lending. It also sets limits on foreign stablecoin issuers and directs the Treasury secretary to carry out an investigation into the national security implications of digital asset activity.

Hagerty responded by urging his colleagues to move forward in good faith.

"We have a choice here: Move forward and make any remaining changes needed in a bipartisan way, or show that digital asset and crypto legislation remains a solely Republican issue," he tweeted.

The bill had faced criticism from both Democrats and Republicans. Some GOP lawmakers had hoped to see broader legislation that would cover all types of digital assets, while Democrats had raised concerns about the lack of consumer protection measures and the potential for illicit activity.

The bill’s path forward remains uncertain. It is unclear whether House Democrats would be able to rally support for a similar measure.

The lawmakers' statement comes amid growing Democratic unease over Trump-linked crypto ventures and potential conflicts of interest.

Gallego and his colleagues said that they recognize the importance of Congress working in a bipartisan fashion to complete this legislation and to get it to the President's desk this year.

"As stablecoins continue to grow in "popularity, it is critical for Congress to work in a bipartisan fashion to complete this legislation and get it to the President's desk this year. Without this urgency, we risk leaving consumers unprotected and vulnerable to predatory practices. We must do better.

"While we started this process with optimism, ultimately several issues remain unresolved that would prevent us from voting for cloture on the legislation in its current form. This legislation lacks sufficient safeguards on anti-money laundering, foreign issuer restrictions, and national security.

"We are hopeful that the leadership in both parties will come together to address these concerns and pass legislation that provides clarity and certainty to the digital asset industry and the American people."

The lawmakers who signed the statement are:

• Sherrod Brown (OH)

• Ruben Gallego (AZ)

• Tim Kaine (VA)

• Jeanne Shaheen (NH)

• Dick Durbin (IL)

• Tammy Baldwin (WI)

• Ben Cardin (MD)

• Raphael Warnock (GA)

• Catherine Cortez Masto (NV)