Crypto Landscape: Unpacking the Senate's Stablecoin Bill Progress

This week saw House Republicans introduce a discussion draft for a market structure bill, but attention remained focused on the Senate, where efforts to push forward stablecoin legislation encountered an unexpected obstacle. The Senate's failure to advance the bill does not signify its demise, as lawmakers have resumed negotiations following the failed vote on Thursday. A potential vote could occur as early as next week. The stablecoin legislation, aimed at a specific segment of the crypto industry, was initially expected to be the easier of the two crypto-related bills to pass, with the other being the broader market structure bill that will define the oversight of digital assets by federal regulators. The timing of the stablecoin bill's passage is now less certain due to concerns over national security, financial system soundness, and accountability, as well as issues related to the President's involvement with stablecoins. Lawmakers are seeking to address these concerns through amendments or separate bills, such as the 'End Crypto Corruption Act', which would prevent the President and other high-ranking officials from issuing or sponsoring crypto assets. The vote on the stablecoin bill, known as the GENIUS Act, did not follow party lines, with some Republicans voting against it. Among the issues was the lack of available bill text at the time of the vote. The cloture vote, requiring 60 Senators to pass, is a key point of leverage for Democrats to include their priorities in the bill. Ongoing negotiations are focused on the treatment of foreign issuers and anti-money laundering provisions. A delay in passing the stablecoin legislation may impact the progress of the market structure bill, but it is expected that if the Senate votes on the stablecoin bill soon, it will not hinder the other bill's advancement.