The GENIUS Act Failed to Pass Cloture in the United States Senate on May 8

The bill, sponsored by Senator Bill Hagerty and co-sponsored by Senators Tim Scott, Kirsten Gillibrand, Cynthia Lummis and Angela Alsobrooks, received last-minute pushback from Democrats

A bill that aimed to create a legal framework for stablecoins in the United States has failed to pass cloture in the Senate.

The bill, known as the Guiding and Establishing National Innovation for US Stablecoins of 2025 Act, or GENIUS Act, was introduced by Senator Bill Hagerty and had the support of both Democrats and Republicans. The measure had also been amended last-minute to address the concerns of Senate Democrats, who took aim at the bill and raised concerns about President Donald Trump’s cryptocurrency ventures.

To address these concerns further, the bill included stricter requirements for stablecoin issuers and further provisions for Anti-Money Laundering.

The GENIUS Act was seen as a bipartisan effort to increase regulatory clarity for digital assets in the United States. The focus of the bill, stablecoins used for payments, was looked at as extending dollar dominance internationally and straying away from more controversial crypto topics.

However, the bill faced difficulties passing cloture, which is a parliamentary procedure used in the Senate to limit debate on a bill and advance it to a vote.

After the procedure failed, Senate Majority Leader John Thune criticized Democrats, saying, “Democrats have been accommodated every step of the way […] frankly, I just don’t get it.”

The vote on cloture was 52-47, with all seven members of the Senate Democratic leadership voting against the bill.

The failure to pass cloture deals a slight blow to cryptocurrency regulation in the country, as several bills are being pushed to create a legal framework for digital assets.

Earlier this year, the House passed a comprehensive cryptocurrency bill that would create a regulatory framework for digital assets and place limits on the activities of the U.S. Securities and Exchange Commission (SEC) in the crypto space.

The bill, known as the Financial Innovation and Technology (FIT) for the 21st Century Act, passed the House of Representatives by a vote of 386–3. It was largely a bipartisan effort, with support from both Democrats and Republicans.

The bill is now set to go to the Senate, although it faces an uncertain future in the upper chamber of Congress.

The House bill aimed to provide regulatory clarity for digital assets and set up a framework for their use in the United States. It would also place limits on the activities of the SEC, which has been the subject of criticism from the cryptocurrency industry for its handling of digital asset regulation.

The bill also included provisions related to stablecoins, a type of cryptocurrency that is pegged to the value of a fiat currency, such as the dollar. Stablecoins have become increasingly popular in recent years as a means of facilitating cross-border payments and other financial transactions.

The GENIUS Act, which began in the Senate, had aimed to provide an alternative legal framework for stablecoins, focusing on streamlining dollar-denominated payment processing and reducing friction in cross-border transactions. It set forth a licensing and supervision regime for stablecoin issuers, requiring them to maintain capital adequacy and cooperate with relevant U.S. financial intelligence units. The bill aimed to place stablecoins operating in multiple jurisdictions within the scope of U.S. AML and financial intelligence reporting obligations. It also sought to prevent non-U.S. stablecoins from operating in the United States without proper authorization.

The bill aimed to strike a balance between innovation in the digital asset space and the need for consumer protection and financial stability. It was a significant step forward in the U.S. Congress's efforts to regulate cryptocurrency and had the potential to shape the future of finance in the country.