Stablecoin Bill Faces Obstacles, Threatening Wider Crypto Regulation

The advancement of landmark stablecoin legislation has been stalled by Senate Democrats due to concerns over President Donald Trump's personal ties to the crypto industry. Over the weekend, Senator Ruben Gallego, along with eight colleagues, expressed opposition to the current version of the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 (GENIUS Act), citing the need for stronger provisions on anti-money laundering, foreign issuers, and national security. The stablecoin bill's delay may have a ripple effect on forthcoming market structure legislation, which aims to define the oversight roles of the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission. Recent announcements, including Trump's dinner for top holders of his memecoin and Abu Dhabi investment firm MGX's use of the Trump family-backed World Liberty Financial's USD1 stablecoin, have raised concerns among Democrats about potential conflicts of interest. While the stablecoin bill is expected to eventually pass, the current impasse may threaten the progress of market structure legislation, which has been demanded by the industry for years. The market structure bill would cover a broader range of activities, including the regulation of stablecoins, and its delay could have significant implications for the crypto industry.