Stablecoin bill loses support from 9 Senate Democrats ahead of vote

A group of nine US Senate Democrats who had previously supported a Republican-led stablecoin bill announced they would oppose it in its current form, threatening the legislation’s passage.

The bill, known as the GENIUS Act and introduced by Senator Bill Hagerty, aims to create the first US regulatory framework for stablecoins—digital tokens pegged to assets like the dollar.

The Democrats said the bill “still has numerous issues that must be addressed” and warned they would not support a procedural vote to advance the legislation unless changes are made.

Among the signatories were Senators Ruben Gallego, Mark Warner, Lisa Blunt Rochester, and Andy Kim, all of whom had backed the bill when it passed the Senate Banking Committee in March.

The lawmakers called for stronger provisions on anti-money laundering, national security, foreign issuers, and accountability for noncompliant actors.

The statement was also signed by Senators Raphael Warnock, Catherine Cortez Masto, Ben Ray Luján, John Hickenlooper, and Adam Schiff.

Despite their opposition, the Democrats emphasised their commitment to responsible crypto regulation and expressed eagerness to work with colleagues to address the issues.

The Senate is expected to begin floor consideration of the bill soon, with a first vote possibly next week.

The bill has been supported by the crypto industry as a step toward regulatory clarity, but the Democrats’ reversal reflects growing concerns within the party.

Caitlin Long, CEO of Custodia Bank, criticised the Federal Reserve for maintaining policies that favor big-bank-issued stablecoins and block banks from issuing stablecoins on permissionless blockchains.

Long said a federal stablecoin bill could override the Fed’s stance and urged Congress to act quickly.

The Democrats’ move may give them leverage to seek additional changes before the bill advances.