A coalition of Senate Democrats who are supportive of cryptos expressed on Saturday that they would oppose stablecoin legislation sponsored by the Republicans if it is brought to the floor in its current form. This outcome has been characterized as a stunning turn of events that might derail the bill in the Senate. The statement has caught observers off-guard just when the Senate is expected to start debates around the key stablecoin bill within the week, with the first process vote on the legislation expected to happen by the middle of next week. The bill needs a minimum of seven Democrats to support it in order to pass through the Senate and intends to establish for the first time in U.S. history a regulatory system for stablecoin issuers, which are digital tokens linked to a dollar or other currency.
Democratic Concerns As Expressed
In a comment issued on Saturday, the nine Democrats presented their stance to explain the opposition on the ‘crypto legislation’ that had initially passed the low house in a more industry-friendly manner to indicate their support. They said, “The bill as it is now does still have a myriad of concerns that need addressing,” and that “we wouldn’t be able to support cloture if the version coming to the floor is the out-of-the-bill median.” They, that is, the lawmakers, also said the bill in question lacks ‘more adequate anti-money laundering and other requirements, such as for closing the doors on foreign issuers, national security, safeguarding the integrity and viability of the financial system, and accountability for noncompliance with the Act.’
Signatures and Prior Agreement
One observation with respect to this reaction is that it is a reaction signed by the nine Democrats, some of whom were even the two from the Senate who voted for the Stablecoin Desk bill when it advanced from the Senate Banking Committee held in March. These were Senator Gallego from Arizona, Senator Warner from Virginia, Senator Rachel from the Delaware and Kind also from New Jersey. Senator Warnock from Georgia, Cortez Masto of Nevada Ben Ray Lujan of New Mexico Hickenlooper of Colorado shared a note of the other five senators who appended the statement.
Industry Interests and Background of the Bill
The bill’s main sponsor is said to be Senator Bill Hagerty from Tennessee. If passed, the bill is expected to provide what is being described as a lobbying milestone for the crypto industry, which has sought for years new legislation that would validate digital assets and strengthen the industry’s growth. It appears that a greater number of Democrats were reportedly supporting crypto-friendly legislation proposed by Republican lawmakers, indicating greater partisan interest in regulating the space.
Complicating Factors and Leverage
The family’s increasing involvement with digital assets has purportedly altered the balance in the past few months. It is reported that a crypto company started by the president’s sons is seeking to issue a stablecoin, which is one of many new undertakings that has ignited new controversy around conflicts of interest. Republicans were reportedly optimistic that the modifications made to the legislation after its markup in the banking committee would enable issues for some sort of bipartisan ‘final stamp’ on the floor vote because so many of the changes were aimed at courting Democrats with promises around language on the cited concerns. Now, they claim the Democrats’ surprise reversal could now grant them new power to force additional concessions before a floor vote.
Calls for Continued Work The opposing Democrats conveyed a desire for continued development on stablecoin regulation. They elaborated, “With the growing adoption of stablecoins, it is important for Congress to come together in a bipartisan way to identify a clear regulatory framework that establishes rules of the road.” They acknowledged the risks of inaction, stating, “We understand that not having any regulation means consumers have no protection, which makes them susceptible to exploitation.” They added, “We have come to this process in good faith and open-minded with the expectation that there would be further refinements to the bill.” They noted while being constructive that, “As it pertains to the bipartisan group, we are looking forward to continuing to collaborate with our counterparts to resolve these problems.” Lead Sponsor’s Response In response to the statement by the Democrats, Sen. Hagerty countered, saying that lawmakers “have to move forward with legislation that inevitably positions America as dominant in the world of digital assets and claims the US dollar for decades to come.” He was quoted saying, “That time is now.” He framed a statement for Congress that “We have a choice here.
Advance and make additional changes, if necessary, in a bipartisan way, or demonstrate that digital asset and cryptocurrency legislation continues to be a Republican issue.” Hagerty’s remarks underscore the continued political deal-making of the stablecoin legislation.
