Key Takeaways
- The GENIUS Act advanced in the Senate with a 66-32 vote after 16 Democrats changed their position.
- The bill had previously failed amid criticism that it could benefit Donald Trump’s crypto ventures.
- The legislation sets new rules for stablecoins, including 1:1 backing and penalties for fraud.
The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act is back on track after a dramatic reversal in the Senate.
Just weeks after Democrats blocked the bill, 16 senators from the party flipped their votes, allowing it to clear a key hurdle with a 66-32 vote.
The sudden turnaround followed days of heated debate over the bill’s potential to benefit President Donald Trump and his family’s crypto ventures.
Democrats Flip to Advance GENIUS Act to Senate
The GENIUS Act, billed as a bipartisan effort to bring regulatory clarity to stablecoins, was stalled two weeks ago after Democrats raised alarms over conflicts of interest and a lack of protections against insider profiteering.
However, during Monday’s cloture vote, enough Democrats switched sides to keep the bill alive.
The stablecoin legislation will now move to the debate and amendment process on the Senate floor, which will begin on May 20 night or Wednesday with a vote on the motion to proceed.
GOP leaders had been hoping to get a final passage vote before Memorial Day, but it is unclear if that will happen now.
“Tonight’s Senate vote on the GENIUS Act marks a major bipartisan step toward modern, clear stablecoin regulation — a key to U.S. financial innovation and leadership.” The Digital Chamber wrote on X.
What’s in the GENIUS Act?
The GENIUS Act introduces basic guardrails for U.S.-issued stablecoins, including:
- Mandatory 1:1 backing with cash or equivalents
- Strict oversight of issuers
- Criminal penalties for fraudulent activity
Supporters say the bill could prevent a regulatory exodus of crypto talent while finally giving U.S. markets a framework for dollar-backed digital assets.
Warren Slams Bill as “Crypto Corruption”
Senator Elizabeth Warren has emerged as one of the fiercest opponents of the GENIUS Act, calling it a gift to Trump’s financial interests.
In a scathing statement following the vote, she said the bill “would turbocharge Trump’s corruption,” pointing to the President’s links to USD1.
Warren also criticized Trump for hosting “private intimate dinners” with holders of his official memecoin.
She argued that Trump and his family have already made millions from crypto ventures and, thanks to USD1, stand to profit even more if the GENIUS Act passes.
Warren raised concerns about the scale and secrecy of USD1’s rise, noting that it’s now the fifth-largest stablecoin by market cap.
She warned the bill could allow “anonymous foreign intermediaries” to use USD1 like a shadow bank account, shielded from oversight and capable of funneling money directly to the President.
She highlighted a recent $2 billion deal between USD1 issuer World Liberty Financial and UAE-based fund MGX as a red flag.
“Trump is already using his stablecoin to get a cut of a $2 BILLION deal with a shady UAE fund. The Senate will vote on the GENIUS Act, a crypto bill that would make the President’s graft even easier. No Senator should vote for it if we don’t fix that problem,” Warren said.
Trump’s Crypto Family Affair A Big Roadblock
Nearly every major pro-crypto bill introduced under the Trump era has carried a Trump family connection, and the GENIUS Act is no exception.
The President and his family are now directly involved in several crypto ventures, including World Liberty Financial and its fast-rising stablecoin, USD1.
The GENIUS Act, which aims to open the door for more private players in the stablecoin market, could directly benefit them.
While the legislation is framed as a move to challenge the dominance of Tether and Circle, critics argue that it could instead entrench new power centers, including Trump-linked entities.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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