Stablecoin bill passed a key procedural vote, finally

He had to remind crypto-friendly Democrats what was at stake – and to ignore the politicization of the legislation by the crypto-hating Massachusetts Sen. Elizabeth Warren

A bill setting up a legal framework for stablecoins and other digital assets passed a key procedural vote Monday night, setting the stage for a final vote on the legislation this week.

The Senate voted 66-34 to proceed to the bill, setting up debate on the measure. The legislation, known as the GENIUS Act, will now be brought to the floor for a final vote, probably later this week.

The bill, sponsored by Tennessee GOP Sen. Bill Hagerty, had been stalled in the Senate for months due to opposition from crypto-hating Massachusetts Sen. Elizabeth Warren and other Democrats.

But after a last-minute push by the Trump administration, which has been keen to get crypto legislation passed, the Senate finally agreed to move forward with the measure.

The bill is a modified version of bipartisan legislation that passed the House last year but ultimately stalled in the Senate. It sets up clear rules for the creation of stablecoins, popular digital assets that are backed up by real assets like US Treasuries, as opposed to the hot air of most crypto.

The bill also includes provisions for better disclosures of the hard assets, better ways to transact the stablecoins and rules for keeping them in reserve, which according to sources will be more efficient because it prevents the big banks from profiting off of one of the traditional banking system’s anachronisms. They won’t be able to profit from the “float” because transactions can take place seamlessly, one of the benefits of digital coins and its underlying blockchain technology.

Hagerty has emerged as crypto’s most effective and much-needed spokesman on Capitol Hill. Sources in the digital coin business say he first fought skepticism in his own party — Sens. Rand Paul and Josh Hawley were no votes — and managed to twist enough arms to get the bill to a vote before the Senate turned to passage of President Trump’s “big, beautiful budget” early Thursday morning.

He also battled Elizabeth Warren. When the procedural vote on the Genius Act came late Monday, Warren began telling her Democratic colleagues that passage of the bill is part of a Trumpian crypto grift since the president and his wife have meme coins. The Massachusetts senator went on to tout Hunter Biden and the president’s son's "swampy" dealings in a bid to get her colleagues to vote against the measure.

The numbers soon went sideways; Hagerty worried he didn’t have the minimum 60 mandatory votes to pass the measure given Senate filibuster rules.

“It will be either 59 votes or 70,” one nervous Hagerty aide predicted.

In the end, he got 36 Republican senators plus 30 Democratic senators, with only Paul, GOP Senator Jerry Moran and GOP Senator Tim Scott absent from the vote.

His winning argument: Stablecoins aren'operability meme coins. The legislation has little to do with Trump’s crypto side hustle. It’s just good law.

Now some bad news. Trump’s crypto business isn’t the scandal of the century that Warren & Co. tried to make it. Unlike Hunter Biden’s swampy overseas dealings, talk of payments to the “big guy,” it’s totally disclosed for the public to debate.

And yet, you can make the case that it looks bad. It’s still an optics problem for the GOP that can be exploited when the senate tries to pass other more important crypto bills. Amendments about Trump’s business dealings could bogged down full passage of the legislation. It’s the likely reason for some of the GOP holdouts.

The problem is obvious: The president appoints the people heading crypto regulation, the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission. Trump is literally de-regulating an industry he’s profiting from. This appearance problem could be a sticking point when Congress takes its next legislative step, a rewrite of securities laws to better serve digital coins.

Plus, some in the crypto industry weren’t happy with the makeup of the administration’s crypto council, which was charged with mainstreaming the industry and getting legislation that does just that.

Led by venture capitalist David Sacks and a former congressional candidate Bo Hines, the council had “no juice” on Capitol Hill, as I reported last week, when Hagerty needed to twist arms just to bring the bill to a vote. When the vote came, Hagerty was alone again.

The White House is pushing back on this interpretation of council’s work; it assembled some formidable counter arguments from industry sources including Cody Carbone, the CEO of the Digital Chamber of Commerce, a leading crypto advocacy group who said in a statement: “The White House Crypto Council has played a pivotal role in advancing digital asset policy in the United States since Inauguration Day. Thanks to Bo and David’s leadership and coordination, we’re on the brink of real, meaningful legislative action for the first time.”