House Democrats boycott hearing on cryptocurrency regulation

House Democrats boycotted a planned hearing on Tuesday to discuss how the cryptocurrency industry should be regulated following ongoing tensions over President Donald Trump's digital asset entanglements.

The hearing titled "American Innovation and the Future of Digital Assets: A Blueprint for the 21st Century" was being held by both the House Financial Services Committee and the House Agriculture Committee, with planned witnesses including former Commodity Futures Trading Commission Chair Rostin Behnam and Coinbase (NASDAQ:COIN) Vice President of Institutional Product Greg Tusar. A Democratic source connected to the House Financial Services Committee told The Block on Monday that a counter-roundtable from Democrats was being planned.

Top Democrat of the House Financial Services Committee Maxine Waters said she objected to the joint hearing at the beginning of the hearing on Tuesday. When asked about the "basis of the objection," Waters directly pointed to Trump's ties to crypto.

"I object to this joint hearing because of the corruption of the President of the United States and his ownership of crypto and his oversight of all the agencies. I object."

House Financial Services Committee Chair French Hill pushed back against Waters' objection.

"I want to be really clear and set the record straight today, the ranking member expressed concern about conflicts of interest, which is why she's disrupting today's joint hearing. Through her actions today, the ranking member has thrown partisanship into what has historically been a strong, good working bipartisan relationship."

The two committees planned to discuss legislation that includes a framework for regulating stablecoins and a broader market structure bill for digital assets.

Lawmakers have had a rocky few days over tensions involving a stablecoin bill, dubbed GENIUS, that aims to create a federal regulatory framework for stablecoins. On Saturday, Democratic Sens. Ruben Gallego, Mark Warner, Raphael Warnock, Lisa Blunt Rochester, Catherine Cortez Masto, Andy Kim, Ben Ray Luján, John Hickenlooper and Adam Schiff said the bill has several issues that need to be addressed, including concerns around needing stronger requirements for foreign issuers and anti-money laundering.

This comes as Democrats have raised concerns over President Trump's involvement in crypto over the past few months. Trump's family has been involved in crypto in a few ways, with Trump and his wife, Melania, launching their own memecoins days ahead of his inauguration and the launch of Trump-backed World Liberty Financial, which recently launched its own stablecoin. Trump also just hosted a crypto dinner on Monday night to raise money for the MAGA Inc. super PAC. According to CNBC, the going rate per plate starts at $1.5 million, making it “among the priciest political fundraisers in recent memory."

The Senate Banking Committee voted to advance the GENIUS Act in March, which garnered both some support and disdain from Democratic senators. At the time, some Democrats argued that there had been no discussion on the bill, while Republicans said the bill had gone through a "very robust bipartisan process."

The bill requires stablecoins to have 100% reserve backing with U.S. dollars and other similarly liquid assets, annual audits with more than $50 billion in market capitalization, among other requirements. It also prohibits foreign issuance in the U.S. but allows stablecoins that are foreign-issued to circulate on the secondary market in the U.S. The Senate version also has language on allowing the Treasury to take action against foreign issuers.

Senate Majority Leader John Thune told Republicans last week that the Senate plans to vote on stablecoin legislation before Memorial Day, according to reporting from Politico. However, Thune may be changing course. On Monday, Thune said he is open to making changes to crypto legislation, according to reporting from Politico.

Lawmakers, mainly led by Republicans, have not only quickly forged ahead on advancing stablecoin legislation, but also a market structure bill to regulate digital assets as a whole as well. On Monday, House Republicans released a discussion draft on a bill to regulate the industry that includes parameters for the CFTC and the Securities and Exchange Commission and has language around disclosures.

The draft builds on work done over the years in a bill nicknamed FIT 21. That bill passed the U.S. House in May 2024, with 71 Democrats in support, but Maxine Waters previously called it one of the worst bills she's ever seen.

The draft is set to be discussed during Tuesday's roundtable.