Compass Investments

– Senate Democrats are determined to oppose the GENIUS Act bill in its current form.

The lack of a unified position could make it difficult to move forward with the Stablecoin Act.

The fate of the bill in the U.S. Senate appeared to be in doubt ahead of Thursday’s vote.

Democrats, led by Senators Elizabeth Warren and Ruben Gallego, said they would not support the GENIUS Act unless tougher anti-money laundering measures and other security provisions were added.

Furthermore, Warren said on May 5 that the bill would encourage corruption, citing the recent $2B crypto deal between Trump-backed World Liberty Financials (WLFI) and Binance.

the Trump family’s Stablecoin has grown to the 7th largest in the world thanks to a suspicious crypto deal with the UAE. The Senate should not pass a cryptocurrency bill this week to facilitate such corruption.

According to The New York Post, the deal involved the UAE taking a minority stake in Binance and paying for it via the WLFI (USD1) stablecoin.

It’s worth noting that Democrats and Republicans supported the GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins of 2025) Act when it was introduced.

However, nine other Senate Democrats announced their withdrawal of support, led by Arizona Senator Ruben Gallego. The senators’ letter stated:

The bill as currently drafted contains a number of problems that need to be addressed, including the addition of stronger anti-money laundering provisions, foreign issuers, national security, keeping our financial system safe….

spite of our desire to continue working with our colleagues to address these issues, we will not be able to support a vote on the bill if the current version comes to the floor.

The passage of the bill was expected to be a major milestone for the crypto industry, especially the fast-growing stablecoin sector.

After its introduction, Republican Senator Bill Hagerty, who initiated the bill, urged his colleagues to support it. He emphasized the need for bipartisan cooperation to make the necessary changes. We must pass legislation that will cement American leadership in digital assets and protect the U.S. dollar for centuries to come. The time is now.

Unsurprisingly, the crypto community has criticized the Democrat-led opposition group, accusing it of influencing the banking sector, to which the adoption of stablecoins appears to be a threat. Paradigm’s head of regulation, Justin Slaughter, reiterated a similar stance, saying:

It’s wild to me that a large part of the Democratic Party has aligned itself with banks in general and even banks that are too big to fail, but it’s happened.

Overall, dollar-linked stablecoins have seen significant growth, led by Tether’s USDT and Circle’s USDC. Passage of the bill will strengthen consumer protection and U.S. leadership in financial innovation.