The GENIUS Act, a bill designed to create a clear regulatory framework for stablecoins in the United States, failed to advance in the Senate after key Democrats pulled their support. The move reflects growing political tension over digital assets and their connection to former President Donald Trump. US Stablecoin Bill blocked as democrats withdraw support over Trump’s crypto involvement
What Is the GENIUS Act?
The Guiding and Establishing National Innovation for US Stablecoins of 2025 Act, also known as the GENIUS Act, aimed to establish nationwide rules for stablecoins used in payments. Stablecoins are digital assets backed by traditional currencies like the US dollar, and they play a key role in crypto transactions.
Senator Bill Hagerty introduced the bill with bipartisan support from Senators Tim Scott, Kirsten Gillibrand, Cynthia Lummis, and Angela Alsobrooks. Lawmakers positioned the GENIUS Act as a step toward giving the US a competitive edge in digital finance while preserving dollar dominance in the global market.
Unlike other crypto bills, GENIUS focused only on stablecoins and avoided controversial issues such as DeFi or NFTs. This narrow focus was meant to encourage cooperation from both political parties.
Why Did the US Stablecoin Bill blocked?
Despite early momentum, the GENIUS Act failed to pass the cloture vote in the Senate on May 8, a key step needed to move forward to a full vote. Democrats withdrew their support due to concerns about Donald Trump’s growing involvement in the crypto industry.
Reports suggest that several Senate Democrats worried the bill could indirectly support projects or companies linked to Trump. In response to these concerns, lawmakers added stricter rules around anti-money laundering (AML) compliance and imposed tighter licensing requirements for stablecoin issuers.
However, the changes were not enough. The bill didn’t receive the 60 votes required to pass cloture, halting its progress in Congress.
Republican Lawmakers Express Frustration
Several Republican leaders voiced disappointment after the bill stalled. Senate Majority Leader John Thune said:
“Democrats have been accommodated every step of the way. Frankly, I just don’t get it.”
Senator Cynthia Lummis, one of the bill’s key supporters and a strong advocate for crypto regulation, posted on social media:
“I’m deeply disappointed that we were unable to pass this important, bipartisan-crafted stablecoin legislation today. Make no mistake, digital assets are the future, and America must lead the way.”
Treasury Secretary Scott Bessent also weighed in. In a statement on X (formerly Twitter), he emphasized the importance of US leadership in global crypto development:
“For stablecoins and other digital assets to thrive globally, the world needs American leadership.”
Industry Leaders Respond to the Setback
The crypto industry reacted quickly to the news. While many expressed disappointment, some also noted the positive bipartisan progress behind the bill.
Kristin Smith, CEO of the Blockchain Association, issued a statement:
“Although we’re disappointed that the GENIUS Act did not pass its cloture vote today, we remain encouraged by the bipartisan engagement on this critical digital asset legislation.”
Smith and others believe this bill laid important groundwork for future regulation. It demonstrated that Democrats and Republicans can collaborate on crypto policy, even if deep political divides remain.
The Political Landscape Around Crypto Is Changing
This incident shows that crypto is becoming a major political issue in the United States. Lawmakers are no longer treating it as a niche topic. Instead, they see digital assets as closely tied to economic growth, national security, and now even presidential politics.
Former President Donald Trump has recently increased his public support for cryptocurrency. He has reportedly backed NFT projects and spoken positively about Bitcoin and stablecoins. This shift has made some Democrats cautious, especially as the 2024 election approaches.
As a result, crypto bills now face more political scrutiny, even when they focus on stable, less controversial technologies like payment-based stablecoins.
What Happens Next?
The failure of the GENIUS Act is a blow to those seeking clear rules for digital assets in the US. However, the strong interest and collaboration from both parties suggest that a new version of the bill could return later this year or in early 2026.
Lawmakers may revisit the proposal with new compromises or attach it to a larger financial regulation package. Meanwhile, other bills covering crypto taxation, consumer protection, and digital wallets are also under discussion.
Until Congress acts, the US crypto industry will continue to operate with uncertainty, as companies face a patchwork of state-level rules and unclear federal guidelines.
Why Stablecoin Regulation Matters
Stablecoins are essential to the daily functioning of the crypto ecosystem. They allow users to trade, lend, and save without the volatility of traditional cryptocurrencies. At the same time, stablecoins pose risks to the financial system if not properly regulated.
Experts believe that well-regulated stablecoins can improve payment systems, lower transaction costs, and give the US dollar a stronger digital presence worldwide. That’s why many industry leaders continue to call for federal action on stablecoin regulation.
Final Thoughts
US Stablecoin Bill blocked, but it sparked a critical conversation about the future of digital finance in the US. As political attention on crypto grows, lawmakers must find a way to balance innovation, regulation, and public trust.
Whether Congress revives the GENIUS Act or introduces a new version, one thing is clear: the race to lead global crypto innovation is on, and the US must decide if it wants to keep up.
