The cryptocurrency industry is gaining significant traction in Washington, D.C with stablecoin legislation gaining significant traction., and it’s not solely due to the influence of President Donald Trump.
As reported by Bloomberg, a notable Democratic ally is emerging, and the industry has demonstrated its political power by effectively unseating long-standing opponents through substantial campaign contributions.
Senate’s Crypto Agenda Gains Traction
Reports indicate that the Senate is on the brink of passing crypto-friendly stablecoin legislation after years of stagnation for the industry’s agenda on Capitol Hill. Senator Kirsten Gillibrand of New York, an digital asset advocate, has recently ascended in her party’s leadership to oversee election fundraising.
With her growing influence, Gillibrand is championing efforts to repeal a tax reporting rule affecting digital assets and is advocating for a favorable regulatory framework for stablecoins.
Cynthia Lummis, a Republican senator from Wyoming and a leading proponent of cryptocurrency in the Senate, highlighted Gillibrand’s pivotal role in advancing these legislative efforts.
“Without her, it doesn’t happen,” Lummis stated, acknowledging the credibility Gillibrand has established in financial matters while representing Wall Street’s home state. Her bipartisan relationships are essential, especially given that legislation often requires 60 votes to pass in the Senate.
Crypto Industry Flexes Political Muscle
Under Trump’s administration, there has been a noticeable shift in federal regulatory attitudes towards cryptocurrencies, with regulators stepping back from aggressive enforcement actions against crypto companies.
However, experts assert that lasting changes will require congressional approval, and bipartisan support will be crucial to navigate procedural hurdles in the Senate.
Last week marked a significant turning point for the crypto industry when five Senate Democrats on the Banking Committee broke ranks with Warren, who had voiced dire warnings about the implications of crypto legislation.
These senators supported a bill regulating privately issued stablecoins pegged to the US dollar, reflecting a dramatic shift from previous years when skepticism from figures like former Banking Committee Chairman Sherrod Brown had stifled progress on industry-friendly initiatives.
The crypto industry’s growing political influence was starkly illustrated when major cryptocurrencies and blockchain advocates funneled substantial campaign contributions into the most well-funded political action committee (PAC) in US history, Fairshake.
This PAC spent approximately $40 million to unseat Brown in the November election, replacing him with Republican Bernie Moreno, a blockchain entrepreneur. Additionally, Fairshake has financially backed several Democratic senators, like Ruben Gallego of Arizona, who are more receptive to crypto.
As the new Congress convenes, the political clout of the crypto industry is clear. Fairshake PAC and its affiliates have amassed an impressive war chest of $116 million ahead of the upcoming midterm elections, positioning themselves as a formidable force.
Despite the industry’s growing influence, consumer advocates express concern that such financial power could overshadow the need for robust protections for digital asset users.
Gillibrand Compares Stablecoins To Traveler’s Checks
Jeff Hauser, executive director of the progressive watchdog group Revolving Door Project, noted that the influx of money has created unease among Democrats. He stated, “Money is talking very loudly,” highlighting the potential risks of allowing financial contributions to dictate legislative priorities.
Gillibrand, however, dismissed the notion that campaign contributions sway senators’ voting decisions. “No one should care, you know, which industries are for or against them because of their political giving,” she said, asserting that legislators respond better to informed debate than to threats.
In response to calls for stronger consumer protections, Gillibrand has proposed legislation aimed at ensuring stablecoins are genuinely stable, mandating one-to-one reserves with oversight from state or federal authorities.
Mainstream financial institutions such as Visa, PayPal, and Stripe are also investing in stablecoin-related projects, signaling a growing acceptance of digital assets in the traditional finance sector.
Gillibrand likened stablecoins to traveler’s checks or gift cards, clarifying that they are not intended to serve as bank accounts or carry FDIC insurance, but rather function as a payment system.
Featured image from DALL-E, chart from TradingView.com
