A bill designed to overhaul stablecoin regulation in the US halted in the Senate amid partisan negotiations.
Senator Bill Hagerty (R-TN) introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in February.
The potential legislation would require stablecoin issuers to maintain backing for their assets on a 1:1 ratio. The bill also states that stablecoin issuer reserves can be made up of US currency; funds held as demand deposits or insured shares at an insured depository institution; and Treasury bills, notes or bonds.
A group of Democrats, including some lawmakers who previously supported the legislation in committee, announced over the weekend that they wanted to pass new stablecoin legislation but believed the GENIUS Act still had outstanding issues.
“The bill as it currently stands still has numerous issues that must be addressed, including adding stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system, and accountability for those who don’t meet the act’s requirements.”
One of the Democrats, the pro-crypto Senator Ruben Gallego (D-AZ), said on Thursday that there had been some meaningful bipartisan discussions on the bill this week, but he argued that lawmakers needed additional time to perfect the potential legislation.
“I went to the floor and asked for more time to negotiate, without delaying the bill’s timeline for final passage. Republicans refused. Without more time to at least finish the bill text, there was no true bipartisan path forward.
“I will always be willing to continue to work on bipartisan stablecoin legislation. America must lead in this space and consumers deserve to be protected.”
The GENIUS Act faced a cloture vote on Thursday and got shot down by a vote of 48-49. Cloture votes, which require 60 “yeas” to pass, end the debate on bills and prevent filibusters.
Kristin Smith, chief executive of the Blockchain Association, urged the debate on the bill to continue.
“We look forward to next steps in this process and continued bipartisan discussion.”
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