The proposed US legislation aimed at regulating stablecoins, such as Circle's USDC and Tether's USDT, hit a roadblock on Thursday as Democratic resistance prevented the bill from proceeding to the debate phase. The crypto industry has been closely monitoring the Senate, where the fate of this legislative priority hangs in the balance. Despite bipartisan approval in a previous Senate Banking Committee vote, the bill failed to secure the necessary 60 votes to advance, with a final tally of 48-49. Senators Josh Hawley and Rand Paul broke ranks with their fellow Republicans to vote against the legislation, while Senate Majority Leader John Thune flipped his vote to no in a procedural move to potentially revisit the bill in the future.
The vote has significant implications, as advancing the bill would have allowed it to be passed with a simple Senate majority, potentially without Democratic support. Some Democrats, including Senator Ruben Gallego, who received substantial backing from crypto industry PACs, expressed concerns that the stablecoin regime requires more robust safeguards against illicit behavior, citing potential conflicts of interest involving President Donald Trump. Gallego advocated for pausing the process, stating that the legislation cannot be rushed and requires more time for consideration. Senator Mark Warner echoed these sentiments, emphasizing the need for greater protections for Americans.
In contrast, Republicans, including Majority Leader John Thune and Senator Cynthia Lummis, urged the Senate to move forward with the debate, allowing for potential amendments and changes. The bill's sponsor, Senator Bill Hagerty, warned that voting against opening the debate would effectively 'kill the crypto industry' in the US. The plan now is to revisit the legislation when Democrats are 'ready to get serious.'