As Trump's Pro-Coin Turn Shapes How Legislators Approach Digital Asset Policy, a New Bipartisan Push to Control Stablecoins is Running Aground

The path of the measure has been reinterpreted by President Trump's sudden crypto embrace. Originally a strident opponent of digital currencies, Trump today supports blockchain innovation

A bipartisan push to regulate stablecoins, originally introduced by Senators Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.), is now facing fresh political friction as President Donald Trump’s pro-crypto stance is shaping how legislators approach digital asset policy.

The measure, which aims to establish a national framework for supervising stablecoins—cryptocurrency linked to the U.S. dollar—has been tasked the Federal Reserve with monitoring systemic risks, sets up clear paths for federal or state registration, and specifies reserve needs.

However, the path of the measure has been reinterpreted by President Trump’s sudden crypto embrace. Originally a strident opponent of digital currencies, Trump has come to support blockchain innovation, digital asset competitiveness, and even crypto donations for his reelection campaign.

This shift has heightened political divisions. Some Democrats are wary of advancing legislation that appears to support the President’s pro-crypto narrative, while Trump-aligned Republicans are highlighting his stance as a key factor in their advocacy for minimal government intervention and accuse Democrats of stifling creativity.

“This bill was developed with balance in mind, but now it’s caught in a more expansive ideological struggle over what kind of financial future the U.S. wants to lead, not just over crypto,” a senior Senate staffer explained.

The bill’s hybrid approach allows stablecoin issuers to operate under state regimes or choose a new federal charter, thus granting them control. However, it ultimately assigns the Federal Reserve the authority to sanction new issuers and supervise broader financial stability, a provision that some Republicans object to as an overreach of power.

Progressive Democrats, on the other hand, argue that the law would permit fraud or instability in an already volatile market without more active federal supervision and stronger consumer protections.

Industry leaders, such as Circle and Paxos, are urging legislators to support the bill, arguing that legal clarity will foster confidence and attract long-term investment in the sector. These companies are also advocating for flexible regulations that won’t hamper innovation or slow down development.

Crypto advocacy groups, the U.S. Chamber of Commerce, and financial technology consortia are pressing Congress to move forward with the measure, warning that politicizing crypto policy could set the U.S. back in the global sphere.

Despite the escalating tensions, Senators Lummis and Gillibrand remain hopeful.

“We need a stablecoin framework to protect consumers and support invention,” Senator Lummis stated in a recent press release. “Politics shouldn’t derail smart, future-oriented policy.”

As the 2024 election season heats up, crypto is transforming from a mere financial concern into a political litmus test. The passage of the measure will hinge on whether legislators prioritize meaningful regulation or become entangled in the optics of a Trump-led crypto narrative.

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