Senate Democrats are expressing strong opposition to President Donald Trump’s crypto venture, with the GENIUS Act, a piece of legislation aimed at establishing a regulatory framework for stablecoins under scrutiny as it approaches a crucial vote later this week, jeopardizing its future.
GENIUS Act Faces Setback
The GENIUS Act, which seeks to regulate stablecoins—cryptocurrencies pegged to assets like the US dollar—initially garnered bipartisan support when it advanced from the Senate Banking Committee in March. However, recent events have led to a decline in Democratic backing.
Concerns have emerged surrounding President Trump and his family’s financial interests in the cryptocurrency sector, particularly following the announcement of a substantial investment by an Abu Dhabi-backed firm in a Trump family-linked crypto venture, World Liberty Financial.
This deal, which involves the purchase of $2 billion in stablecoins from World Liberty Financial to invest in the cryptocurrency exchange Binance, has raised alarm bells among Senate Democrats.
In response, they are advocating for legislation that would prohibit elected officials and their families from engaging in cryptocurrency transactions, including those involving stablecoins.
White House Defends Trump’s Crypto Interests
Senate Minority Leader Chuck Schumer has advised his colleagues to withhold support for the GENIUS Act until their concerns are addressed. Ongoing discussions between Republican and Democratic senators are focused on potential amendments to the bill.
Senate Majority Leader John Thune has indicated a willingness to consider modifications but emphasizes the need to proceed with the legislation.
Democratic Senator Ruben Gallego, a member of the Senate Banking Committee, criticized the handling of the bill, suggesting that Republicans have sought to pressure Democrats into compliance without adequately addressing their concerns regarding anti-money laundering, national security, and consumer protections.
Adding to the tension, Senator Elizabeth Warren, the top Democrat on the Banking Committee, has circulated a fact sheet outlining perceived deficiencies in the GENIUS Act, particularly in safeguarding against corruption and protecting consumers.
Her primary recommendation is to prevent elected officials and their families from participating in stablecoin business ventures. Warren has voiced her belief that allowing Trump’s involvement in stablecoin deals would be detrimental.
In a parallel effort, Senator Jeff Merkley introduced the End Crypto Corruption Act, which aims to prohibit high-ranking government officials from benefiting financially from cryptocurrency.
This proposed legislation has garnered support from several Democratic senators, reinforcing the party’s commitment to addressing potential conflicts of interest in the crypto space.
As the debate intensifies, Senator Bernie Sanders plans to host a roundtable with experts to discuss the potential economic risks posed by the GENIUS Act.
The implications of the Trump family’s involvement in cryptocurrency have prompted calls for greater scrutiny and transparency in the financial dealings of public officials.
In light of these developments, the White House has defended President Trump’s financial interests, stating that his assets are managed in a trust by his children and asserting that there are no conflicts of interest.
The administration continues to advocate for the passage of stablecoin legislation on a bipartisan basis, positioning the US as a leader in the evolving digital financial landscape.
Featured image from NBC, chart from TradingView.com
