Senate expected to forge ahead with vote to advance crypto bill with bipartisan talks ongoing #CriptoNews

WASHINGTON — The Republican-led Senate is expected to move forward with a vote Thursday on a bipartisan crypto regulation bill, but it’s unclear if enough Democrats will support it as negotiations between the two parties are ongoing.

The Senate Banking Committee passed the GENIUS Act, which would create the first U.S. regulatory framework for issuers of stablecoins, digital tokens pegged to currencies like the dollar, in April, with five Democrats backing the legislation.

But after Senate Majority Leader John Thune, R-S.D., said the Senate would swiftly take the measure up, Senate Minority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., the ranking member on the Banking Committee, privately urged Democrats — including those who support the bill — to withhold their vote to extract more concessions from Republicans, according to three people with direct knowledge of their comments.

Thune said on Thursday he is still having conversations with his Democratic colleagues about changes to the bill, and expects to know within the next few hours whether they have the votes to proceed.

“We’re trying to see if there’s a path forward that would enable us to get any changes that they would like, additional changes, because we’ve had, like I said, a lot of them already made to the bill, but at some point they’re going to have to take yes for an answer.” Thune told reporters Thursday.

Democrats are seeking explicit provisions barring members of the executive branch, including President Donald Trump and his family, from owning or trading cryptocurrency and stronger anti-corruption provisions. The bill requires 60 votes to advance to final passage in the Senate, where Republicans hold a 53-47 majority.

For more than three hours on Wednesday morning, a bipartisan group of crypto-focused senators huddled in the office of Banking Committee Chair Tim Scott, R-S.C.

The list included Sens. Bill Hagerty, R-Tenn.; Cynthia Lummis, R-Wyo.; Mark Warner, D-Va.; Ruben Gallego, D-Ariz.; Kirsten Gillibrand, D-N.Y.; and Angela Alsobrooks, D-Md, according to three sources familiar with the meeting. The group held another closed-door meeting on Wednesday night for several hours and have yet to reach a consensus.

Hagerty led negotiations with the Democrats who voted for the legislation in committee but later backtracked on their support, citing in a statement “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.”

Republicans, meanwhile, heard from tech entrepreneur David Sacks for more than an hour Wednesday, according to multiple senators who attended the briefing.

“Well, we had a good conversation yesterday,” said Sen. Rick Scott, R-Fla., who supports the legislation. “Everybody needs to understand, trading bitcoin is totally different than stablecoin.” (Bitcoin is not pegged to fiat currency, like the U.S. dollar.)

Asked if most members of Congress understand what different digital assets are and how they are used, Sen. Jon Husted, R-Ohio, chuckled.

“That’s a great question. I can’t speak for other people. I know I’ve had to spend a lot of time on it myself to really understand the issue,” he said. “There is no regulatory regime around this right now. It is the Wild Wild West, and we want to start to recognize that we need some security around this.”

The shift in Democratic support comes after an Abu-Dhabi backed investment firm announced last month that it will invest billions of dollars in the Trump family crypto venture, World Liberty Financial. The news of the investment sparked backlash from Senate Democrats, who argued that it is “evidence” that the president is using his office to enrich himself. And it comes after Trump held a $1.5 million-per-plate fundraiser on Monday focused on high-profile crypto investors and tech entrepreneurs.

“The opportunities for grift — in which the Trump Administration offers favors to the UAE or to Binance in exchange for their massive payouts — are mind-boggling,” Sens. Warren and Jeff Merkley, D-Ore., wrote in a Monday letter to Jamieson Greer, the acting director of the Office of Government Ethics. (Binance is a cryptocurrentcy exchange.)

Warren and Gillibrand signed on to legislation from Merkley that would ban presidents, lawmakers and their families from financially benefiting, issuing, endorsing or sponsoring crypto assets, including stablecoins. The End Crypto Corruption Act directly targets Trump and his family’s crypto ventures, including nontraditional cryptocurrency endeavors like Trump’s dinner and private White House tour for the top investors in his meme coin, $TRUMP.

Sen. Chris Murphy, D-Conn., has joined the chorus of Democrats calling for legislation that specifically targets meme coins like $TRUMP, introducing his own broader proposal, along with Rep. Sam Liccardo, D-Calif., to crack down federal officials from using their position to profit off digital assets.

The counter-messaging effort from Senate Democrats would likely fail in the GOP-controlled Senate. But Sen. John Kennedy, R-La., said he would be in favor of barring “all public officials” from using their positions to profit off of cryptocurrency.

The GENIUS Act only regulates stablecoins and does not touch meme coins, a different type of cryptocurrency that derives its value from internet culture rather than from an underlying utility or asset. But proponents of the legislation argue that the bill does have protections against money laundering and fraud.

Changes were made to the legislation at the request of Democrats after it was reported out of committee, including preserving state regulatory authority for foreign-issued stablecoins and broadening suspicious transaction monitoring and reporting for stablecoin users, according to two people familiar with the process.

The draft bill is expected to contain a provision that would ban elected officials from issuing stablecoins, according to Thune and one Democratic aide involved in the process.

“I know we could come to a good, solid bill. We just need to take the time to actually work together on this,” Gallego told reporters. “There’s a lot of backsliding that happened between the committee vote and the text that came out. And I think that we can get there, but the version that currently is in place is not what we negotiated before.”

Thune maintained he is following “regular order” and that further changes to the bill could happen during an amendment process, a step that is only unlocked if senators provide 60 votes to advance the bill first. The House Financial Services Committee voted to pass a competing bill, the STABLE Act, which would also provide a regulatory framework for stablecoins, last month.

If the Senate ultimately passes the bill, the House would still need to take it up before it could head to Trump’s desk for a signature.

“When will the Democrats take yes for an answer? And if they have other suggestions and things that they want incorporated into the draft, we are certainly welcome to taking a look at and working with them on that, but we need to start moving forward,” Thune said on Tuesday.

It’s not just Senate Democrats reversing course: A few Republicans have indicated they plan to vote against the GENIUS Act, including Sen. Josh Hawley, R-Mo., who said that without prohibiting tech companies from owning stablecoins, he’s not comfortable supporting the bill.

Sen. Rand Paul, R-Ky., who often deviates from his party, said he planned to vote against the legislation due to fears of over regulation.

“I’m not a real big fan of federal regulations period, much less starting a whole new scheme for a whole new industry that exists and seems to be doing OK without federal regulations.” Paul told reporters Tuesday.