Tim Scott blames partisan politics for GENIUS Act's failure to reach Senate floor vote

Senate Banking Committee Chairman Tim Scott blamed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act's failure

A copy of the email can be found here.

Senate Banking Committee Chairman Tim Scott has blamed partisan politics for the failure of the bipartisan Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act to reach the Senate floor for a vote.

The vote was expected to take place on May 8, but it ultimately fell short of the necessary support after several Democrats unexpectedly shifted their stance against the bill. The move surprised members of the crypto community, who had anticipated a step toward greater affordability and innovation. However, the prevailing opinion among those present was that the vote was scuttled due to a display of partisan politics.

“After months of bipartisan work to craft legislation that will make America’s economy safer and cheaper for the American people, today we witnessed a disappointing display of political gamesmanship that puts partisan politics above policy, and obstruction above innovation,” Scott said in a statement.

The bill had previously undergone multiple amendments to address concerns raised by Democrats, including stricter requirements for stablecoin issuers and further provisions for Anti-Money Laundering. These amendments were made in response to an earlier version of the bill being blocked in April due to insufficient support.

Despite the bipartisan nature of the bill’s passage in the House and the adjustments made to accommodate Democratic priorities, several senators from the party unexpectedly shifted their stance against the bill.

The bill's failure to reach the Senate floor comes after a period of heightened scrutiny on President Donald Trump's crypto-related activities.

Massachusetts Senator Elizabeth Warren, a leading voice on crypto regulation, expressed concerns that Trump family-linked stablecoin, USD1, had surged in market value due to a “shady crypto deal with the United Arab Emirates.”

She said, “The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption.”

On May 1, Abu Dhabi-based investment firm MGX used the Trump-linked stablecoin USD1 to settle a $2 billion investment in Binance. According to CoinMarketCap data, the stablecoin's market cap shot up from under $137 million on May 1 to nearly $2.13 billion on May 2.

Democrats had previously sponsored multiple bills to address concerns around Trump’s crypto-related activities. Four of the five pro-crypto Democrats who passed the GENIUS Act in the Senate Banking Committee signed their names to a statement on May 3, saying that they do not feel comfortable with the direction stablecoin legislation is taking.

While the letter did not mention Trump directly, Representative Maxine Waters was more explicit in her opposition.

“If there is no effort to block the President of the United States of America from owning his stablecoin business [...] I will never be able to agree on supporting this bill, and I would ask other members not to be enablers,” said Waters.

Earlier this week, Democrats sponsored the Modern Emoluments and Malfeasance Enforcement Act, or the MEME Act, to prevent federal officials from profiting from memecoins. Senator Jeff Merkley and Senate Minority Leader Chuck Schumer also introduced the End Crypto Corruption Act.

The End Crypto Corruption Act would ban the president, vice president, senior executive branch officials, members of Congress and their immediate families from financially benefiting from issuing, endorsing or sponsoring crypto assets, including memecoins and stablecoins.

In a statement published on Merkley’s website, he said that “people who wish to cultivate influence with the president can enrich him personally by buying cryptocurrency he owns or controls.”

“This is a profoundly corrupt scheme. It endangers our national security and erodes public trust in government. Let’s end this corruption immediately,” added Merkley.

In a statement to CBS News, Warren said that both Democrats in favor of and opposed to the GENIUS Act “agree that green-lighting Donald Trump’s corrupt stablecoin deals is wrong.”

“The GENIUS Act will simply facilitate Trump’s crypto corruption. We are hopeful that the administration will take steps to address the emerging issues around foreign government-linked entities making large-scale investments in U.S. assets in a manner that is not consistent with U.S. economic and national security interests,” said a spokesperson for the White House.