This Week, the US Senate Failed to Move Forward on a Major Stablecoin Regulation Bill Called the GENIUS Act

This week, the US Senate failed to move forward on a major stablecoin regulation bill called the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act).

This week, the US Senate failed to advance a major stablecoin regulation bill known as the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act).

On May 8, Democrat lawmakers joined forces to block the bill, leading to a vote of 49 against and 48 in favor of advancing the legislation.

However, several Democrats who had previously backed or co-sponsored the GENIUS Act—including Ruben Gallego, Mark Warner, Lisa Blunt Rochester, Andy Kim, Kirsten Gillibrand, and Angela Alsobrooks —ultimately voted against it.

This surprising turn of events comes despite the bill having already secured bipartisan support.

Gallego and his colleagues explained their decision in a joint statement, highlighting the need for stronger safeguards in the legislation.

According to the lawmakers, the bill still lacked critical language on anti-money laundering, more robust oversight of foreign stablecoin issuers, and clearer enforcement tools to ensure compliance.

They also pressed on the urgency of addressing national security concerns and the stability of the broader financial system in the legislation.

“We recognize that the absence of regulation leaves consumers unprotected and vulnerable to predatory practices. We have approached this process constructively and with an open mind, with the understanding that additional improvements to the bill would be made,” the Democrats stated.

However, Republican lawmakers, like Pete Ricketts, expressed disappointment over the vote outcome, alleging that Democrats prioritized political interests over policy progress.

"Heartless Democrats just voted to kill the GENIUS Act, which would have brought much-needed regulation to stablecoins and Web3. Democrats preferred to scuttle the bill over trivial complaints and preferred to keep stifling new technologies," Ricketts wrote on X.

Bo Hines, executive director of the President’s Council of Advisers on Digital Assets, added that Senate Democrats missed a chance to enact sensible reforms to boost innovation and secure the US as a leader in financial technology.

“This bill wasn’t about politics—it was about building the future. It was about modernizing our outdated payment systems, and securing our position as the global standard-setter in financial technology. Instead, Democrats caved to fringe ideological factions, abandoning the opportunity to bring clarity to the market and foster American innovation,” Hines stated.

Meanwhile, Matt Hougan, Chief Investment Officer at Bitwise, described the outcome as "deeply unfortunate."

He pointed out that without clear regulations, stablecoin adoption could stall and market growth—especially for altcoins—would be suppressed.

Moreover, Hougan noted that a regulatory stalemate could lead to increased volatility across non-Bitcoin assets this summer.

“If stablecoin and market structure legislation grind to a halt in DC, it’s going to be a long summer for non-bitcoin crypto assets,” Hougan remarked.

Tether Reacts to Updated Stablecoin Bill

Following the failed vote, a newly updated draft of the GENIUS Act has surfaced with several notable changes.

The new draft now lists only four Republican Senators as sponsors: Bill Hagerty, Cynthia Lummis, Tim Scott, and Dan Sullivan.

It also expands U.S. jurisdiction to cover foreign stablecoin issuers who serve American users, suggesting a move towards broader oversight.

The latest draft also includes a revised definition of digital asset service providers and updates the types of assets that can be used to back stablecoins, hinting at potential changes in reserve management requirements.

These changes were made in response to feedback from key stakeholders, and they suggest an ongoing effort to forge consensus on critical aspects of digital asset regulation.

As the House Financial Services Committee prepares to vote on its own version of a stablecoin bill on May 10, the focus now shifts to the lower chamber to see how the legislation will progress.