On May 8th, the stablecoin bill (GENIUS Act) failed to pass a crucial procedural vote in the US Senate. This occurred after several Democrats refused to bring the document to the floor of the upper chamber of Congress, reports Decrypt.
Among those opposing were Ruben Gallego of Arizona, Mark Warner of Virginia, Lisa Blunt Rochester of Pennsylvania, Andy Kim of New Jersey, Kirsten Gillibrand of New York, and Angela Alsobrooks of Maryland. Gillibrand and Alsobrooks were co-authors of the bill.
The chances of the GENIUS Act being passed have now significantly diminished. The setback could lead to a loss of bipartisan support and political momentum for other cryptocurrency initiatives, the publication explained.
Previously, Democratic representatives intended to approve the GENIUS Act. A week earlier, an updated version of the bill was released, which many had not had the opportunity to review. Some senators advocated for further refinement of the document.
According to Decrypt sources, this prompted nine Democrats to issue a statement withdrawing support for the GENIUS Act, citing concerns over revised anti-money laundering and national security requirements.
In response, Republicans held a series of meetings the day before the vote, attempting to reach a mutually acceptable agreement.
“Today, Democrats decided to play biased politics. They have once again proven that they are not proponents of innovation and do not prioritize the interests of the American people,” — reacted Bo Hines, executive director of the digital asset markets working group.
Previously, Hines and his team identified the development of a regulatory framework for stablecoins as a priority.
One legislator expressed hope to the publication that the GENIUS Act would be brought to a vote again on May 12th, but declined to assess the likelihood of such an outcome.
The Trump Factor
The situation was exacerbated by a potential conflict of interest involving the family and associates of US President Donald Trump due to initiatives related to digital assets.
In the Senate, an official investigation was launched on this matter. Richard Blumenthal, a member of the relevant committee, sent inquiries to World Liberty Financial (WLF) and Fight Fight Fight (issuer of TRUMP) demanding disclosure of the current president’s involvement in the projects.
In March, World Liberty Financial confirmed plans to launch a dollar-pegged coin, USD1. The stablecoin is backed by short-term US Treasury obligations, deposits, and other cash equivalents. The asset will be issued on the Ethereum and Binance Smart Chain networks.
In April, the company proposed an initiative to distribute a “small” amount of USD1 to native token holders to test the airdrop function in WLF’s Ethereum infrastructure.
In May, WLF opened a vote among WLFI token holders on the USD1 stablecoin airdrop proposal.
Previously, the Senate described the Trump-announced gala dinner for TRUMP whales as “exceeding any previous standards for impeachment.”
It later emerged that the president plans a similar event for wealthy crypto investors who have been his political sponsors.