Setback for Crypto: Senate Votes Against GENIUS Act

The U.S. Senate dealt a blow to the crypto industry on Thursday by voting against advancing the GENIUS Act, a crucial bill aimed at regulating stablecoins. The procedural cloture vote fell short, with 48 senators in favor and 49 against, well below the 60 votes required to move forward with formal debate.

The defeat came despite months of bipartisan negotiations and a prior victory in the Senate Banking Committee. However, opposition from Senate Democrats, citing concerns about insufficient safeguards against illicit finance and foreign stablecoin issuers, derailed momentum. Some Democrats also raised issues surrounding former President Donald Trump’s connections to the crypto space, including his involvement with memecoin and fundraising dinners.

Senators Josh Hawley and Rand Paul, both Republicans, diverged from their party lines to vote against the bill, and Senate Majority Leader John Thune switched his vote at the last minute to allow for a potential reconsideration of the measure. Sen. Ruben Gallego, who had supported the bill, called for a pause to revise the legislation, reflecting the growing division on the issue.

Despite the setback, some lawmakers remain hopeful. Sen. Mark Warner emphasized that the bill was not dead and still required important protections for American citizens. Meanwhile, Republican Sen. Cynthia Lummis cautioned that delays could hamper U.S. leadership in the crypto industry.

Sen. Bill Hagerty, the sponsor of the bill, condemned the vote, asserting that it amounted to "killing the crypto industry here in America." The debate over the bill is expected to continue, with negotiations possibly resuming next week.