The path forward for landmark stablecoin legislation in the US Senate has hit a significant snag

By key Democratic lawmakers express reservations linked directly to President Donald Trump's growing personal and financial connections within the cryptocurrency industry.

The path forward for landmark stablecoin legislation in the US Senate has hit a significant snag, as key Democratic lawmakers are expressing reservations linked directly to President Donald Trump’s growing personal and financial connections within the cryptocurrency industry.

What was recently seen as a bipartisan effort now faces political headwinds, potentially delaying not only stablecoin rules but also broader market structure legislation for the digital asset sector.

Over the weekend, a group of nine Senate Democrats, signaled by Senator Ruben Gallego of Arizona, said they would oppose advancing the current version of the main stablecoin bill, known as the Guiding and Establishing National Innovation for US Stablecoins of 2025 (GENIUS Act).

Their unified stance poses immediate procedural hurdles, as Senate rules typically require 60 votes to overcome filibusters and move legislation forward. Gallego, notably elected with substantial backing ($10 million) from the crypto-focused super PAC Fairshake, is now leading the charge expressing concerns over provisions on critical issues like anti-money laundering, national security, and consumer protection.

However, sources say these concerns are masking deeper anxieties related to President Trump’s potential personal financial gains from the crypto space, which are spurring Democrats to stall.

In a report by CoinDesk, it was confirmed that Senate Minority Leader Chuck Schumer had privately urged Democrats to withhold support during a caucus meeting last week, preempting Gallego’s public announcement. Axios was first to report this internal division.

Trump's crypto ventures raise alarm

Two recent developments appear to have particularly crystallized Democratic concerns.

First, President Trump announced plans for a dinner exclusively for top holders of his own branded memecoin.

Second, Abu Dhabi investment firm MGX announced its intention to utilize USD1 – a stablecoin associated with World Liberty Financial, a firm backed by the Trump family – for a significant investment into the cryptocurrency exchange Binance.

As USA Today noted, these ventures suggest Trump could personally profit to the tune of hundreds of millions of dollars from activities that would be legitimized or facilitated by the proposed legislation.

President Trump, during a weekend interview on Meet the Press, denied seeking personal profit from his crypto initiatives.

“I’m not profiting from anything. All I’m doing is, I started this long before the election. I want crypto. I think crypto’s important because if we don’t do it, China’s going to… But I want crypto because a lot of people, you know millions of people want it.”

Lawmakers face pressure as Trump touts 'billions' in crypto gains

This emerging conflict threatens to derail the momentum not only for the stablecoin bill but also for much-anticipated market structure legislation, which industry stakeholders have long sought to provide clarity on how the Securities and Exchange Commission and the Commodity Futures Trading Commission should oversee the broader digital asset market.

One individual working closely with lawmakers told CoinDesk that while the stablecoin bill might eventually pass, the current delay could jeopardize its progress, which in turn would almost certainly stall any movement on the more comprehensive market structure legislation.

Concerns are mounting about how long this legislative slowdown could last and what further concessions might be needed to appease Democrats.

Senator Elizabeth Warren, a leading Democrat on the Senate Banking Committee and a prominent crypto skeptic, was blunt in her assessment. Referring to the MGX deal involving the Trump family-linked stablecoin (shared publicly by Eric Trump), she posted on Bluesky that the Senate should reject any bill that would “facilitate this kind of corruption.”

Senator Elizabeth Warren and Senator Jeffrey Merkley sent a letter on Monday urging the U.S. Office of Government Ethics to probe the reportedly announced investment by Abu Dhabi-based firm MGX into Binance.

The resistance isn’t confined to the Senate. Representative Maxine Waters, the top Democrat on the House Financial Services Committee, informed the committee’s chair on Monday that she would block efforts to hold a joint hearing with the House Agriculture Committee aimed at addressing market structure legislation.

Politics vs. policy: industry urges action

Financial policy analyst Jaret Seiberg of TD Cowen characterized much of the emerging scenario as "politics."

In a note to clients, he observed that Trump’s personal stake makes it politically difficult for Democrats to support legislation regulating his family’s interests. However, he predicts that the stablecoin bill will likely still pass the Senate eventually, perhaps not this week, considering the crypto industry’s significant lobbying power and resources.

"It is hard for us to see why the Democrats would take on that fight when they can leverage significant concessions from the GOP on the stablecoin bill."

However, he highlighted that the optimal scenario for the administration appears to be passing both the stablecoin and market structure bills.

"The White House has signaled support for both bills, and passing them would largely align with the optimal outcome preferred by the administration. In addition, the administration signaled that it may veto any bill that does not largely conform with its proposals."

This emerging scenario appears to be presenting a setback