(Zero Hedge)—Treasury Secretay Scott Bessent slammed Senate Democrats on Thursday for nuking a stablecoin bill that they began stalling on earlier in the week.
“For stablecoins and other digital assets to thrive globally, the world needs American leadership,” Bessent posted on X. “The Senate missed an opportunity to provide that leadership today by failing to advance the GENIUS Act.”
The GENIUS Act of 2025 (Guiding and Establishing National Innovation for US Stablecoins ), died after a Senate vote of 48-49, short of the 60 votes needed to move the measure further along the road to final passage, would create a framework for payment stablecoins
The bipartisan proposal introduced by Sens. Bill Hagerty (R-TN), Tim Scott (R-SC), Kirsten Gillibrand (D-NY), and Cynthia Lummis (R-WY), would have allowed stablecoins to be insured by depository institutions, or state-qualified issuers that meet specific regulatory standards – which would include maintaining 100% reserves in US dollars or short-term Treasury securities, publicly disclosing reserve compositions on a monthly basis, submitting to audits if their market cap exceeds $50 billion, and various consumer protection provisions such as prohibiting misleading claims about government backing.
According to Bessent, “This bill represents a once-in-a-generation opportunity to expand dollar dominance and U.S. influence in financial innovation. Without it, stablecoins will be subject to a patchwork of state regulations instead of a streamlined federal framework that is more conducive to growth and competitiveness,” adding “The world is watching while American lawmakers twiddle their thumbs.”
For stablecoins and other digital assets to thrive globally, the world needs American leadership.
The Senate missed an opportunity to provide that leadership today by failing to advance the GENIUS Act.
This bill represents a once-in-a-generation opportunity to expand dollar…
— Treasury Secretary Scott Bessent (@SecScottBessent) May 8, 2025
Things Go Sideways
Things went south over the weekend for the bill – after Senate Democrats who previous supported the GENIUS Act withdrew support for the bill after GOP leadership sought to fast-track a vote on the legislation – accusing Republicans of cutting off negotiations early, and claiming that the latest version of the bill lacked strong enough provisions over anti-money laundering, national security, and other issues.
This came after several days of negotiation between the parties with rumors of a deal – however Senate Democrats said on Thursday morning that they had yet to see new bill text with Senate Majority Leader John Thune (R-SD) signaling a willingness to amend the GOP-backed stablecoin legislation to pass the bill in the coming weeks, after Democratic lawmakers pushed for additional hearings before advancing any legislation.
Democrats also suggested that there were ethical concerns about President Trump’s ties to crypto. As Amin Haqshanas reported earlier via CoinTelegraph.com, in a May 5 letter to the Office of Government Ethics, Senators Elizabeth Warren and Jeff Merkley said that Trump and his family stand to personally profit from an investment involving UAE state-backed firm MGX, crypto exchange Binance and World Liberty Financial (WLFI).
The senators called for an urgent probe, warning the deal may violate the US Constitution’s Emoluments Clause and federal bribery statutes.
At the center of the controversy is WLFI’s USD1 stablecoin, reportedly chosen for a $2 billion investment MGX plans to make into Binance.
The senators said the transaction amounts to a potential backdoor for foreign influence and self-enrichment, with Trump’s allies allegedly set to receive hundreds of millions of dollars:
“This deal raises the troubling prospect that the Trump and Witkoff families could expand the use of their stablecoin as an avenue to profit from foreign corruption.”
Further complicating ethics concerns, Trump hosted a $1.5 million-per-plate dinner on May 5 at his golf club in Sterling, Virginia. The event came just days after hosting a $1 million-per-plate fundraiser for the MAGA super PAC.
According to The Hill, Senate Republicans have expressed frustration with Democrats – arguing that they have worked on the legislation for months and incorporated their feedback, with Thune – who changed his vote from Yea to Nay in a procedural move to preserve the right to bring the measure up again – suggesting that Democrats may be trying to prevent Republicans and President Trump from securing a bipartisan win.
“I just have to say frankly I just don’t get it. I don’t know what more they want,” said Thune, adding “Which of course makes you wonder if this is about the bill at all. Or if it’s simply Democrats obstructing because they want to deny Republicans or President Trump a bipartisan win. Now given the fact that Democrats keep moving the goal posts, it’s hard not to suspect that is the case.”
