Trump's crypto ventures are delaying crypto legislation

Discussions about the conflict of interest surrounding US President Donald Trump’s crypto ventures are delaying crypto legislation.

A bill that would regulate US payment stablecoins has failed to pass in the Senate.

The GENIUS Act, which was expected to pass easily, stalled in the Senate on Friday in a 48-49 vote on Friday, May 6.

The bill, which aimed to create a legal framework for stablecoins operating in the US, was met with bipartisan support and had advanced smoothly through the legislative process.

However, it ultimately failed to secure enough votes to pass, surprising legal experts who viewed its passing as a mere formality.

The bill’s failure was attributed to the actions of some Democratic Senators who stalled the vote.

According to reports by The Block, the issue might stem from President Donald Trump’s crypto ventures and the conflict of interest they pose.

The GENIUS Act was expected to be part of a broader market structure bill.

But discussions on the latter have stalled due to the ongoing saga of Trump’s crypto activities.

The saga began in December when Trump launched his own memecoin, $TRUMP, ahead of his inauguration.

The coin’s price shot up, benefitting Trump-linked companies.

However, the coin later collapsed, leaving small investors who bought into the hype with huge losses.

Later, in March, Trump’s family was reportedly planning to buy a stake in the US arm of Binance.

The move sparked concerns given that Binance has faced anti-money laundering legal issues in several jurisdictions.

Moreover, Trump-linked World Liberty Financial (WLF) planned to launch the USD1 stablecoin later this year, backed by investment giant MGX.

This venture has also fueled heated debates about Trump’s use of crypto ventures to enrich himself at the expense of the common good.

Some Democratic Senators have even introduced the End Crypto Corruption Act, which would prevent Congress members and their families from endorsing crypto.

This initiative highlights the growing concern among lawmakers about the ethical implications of crypto involvement by high-ranking officials.

Despite the setbacks, negotiations around the GENIUS Act are ongoing, but its timeline remains uncertain.

If passed, the GENIUS Act would require stablecoin issuers to hold reserves in cash or cash equivalents for each outstanding stablecoin.

It would also mandate issuers to disclose any material changes in the composition of the reserves at least quarterly.

The bill aimed to create a legal framework for stablecoins operating in the US, focusing on regulating stablecoins pegged to the US dollar.