U.S. Senate Takes First Big Step to Advance Stablecoin Bill

What to know:

The U.S. Senate Banking Committee has advanced the crypto industry's stablecoin regulation bill, a first major step toward getting the effort to President Donald Trump's desk to be signed into law.

With its first committee approval, the  bill that would regulate U.S. stablecoin issuers  at the federal level now needs passage by the overall Senate, and a similar version also  awaits approval in the House of Representatives . While a number of hurdles remain, including an eventual melding of the different bills from each chamber, the committee advanced the bill with a 18-6 vote.

Many Democrats on the committee acknowledged the need for the bill while also seeking to add a number of amendments to add additional regulatory controls and limits, each of which was shot down with partisan votes.

Senator Elizabeth Warren, the panel's ranking Democrat, led her colleagues' objections against certain provisions of the bill, which she said marks "a clear threat to our national security" in its current form. Warren grew increasingly frustrated over the course of the 2.5-hour hearing as each of her proposed amendments to the bill were rejected.

“It would be crazy to advance this bill when it’s got so many holes in it that have been pointed out, and to advance it at the exact moment that news is breaking about Donald Trump trying to create his own stablecoin with an outfit that is notorious for breaking the law,” Warren said near the end of the hearing, referring to reporting that the Trump-linked World Liberty Financial had been in talks with crypto exchange Binance. “Jamming this through while Donald Trump is out there making a deal with a criminal stablecoin platform makes no sense. We will regret this.”

Another Democrat, Catherine Cortez Masto of Nevada, complained that committee Republicans were blowing off debate during the markup — a type of hearing meant to consider and discuss amendments to a piece of moving legislation — and a number of them weren't showing up at the hearing.

"It is a great start, but it is not ready for prime time," the senator said of the Republican-driven bill.

"Markups are messy," said panel Chairman Tim Scott, a South Caroline Republican, in response. "We've been working nights, days, weekends to get this accomplished."

Senate Bill Hagerty, the Tennessee Republican who was the legislation's primary author, called the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) a "truly bi-partisan effort" that had taken on Democratic input. Democrats Kirsten Gillibrand of New York and Angela Alsobrooks of Maryland? cosponsored the bill, alongside a number of Hagerty's fellow Republicans.

"It presents common sense rules that protect consumers, promote competition, and foster innovation," Hagerty said. "It’s time we provide the clarity and stability that our country and its innovators so desperately need."

The crypto industry is counting on an increasingly strong majority of lawmakers in both chambers to back its policy efforts this year. So far this month, a separate effort to remove an Internal Revenue Service rule opposed by the crypto sector won wide bipartisan votes.

It was the Democratic-majority Senate Banking Committee in the previous Congress that held back crypto legislation that had advanced in the Republican-led House. The 2024 elections put Republicans in charge of both chambers, and Scott has made stablecoin legislation one of his top opening priorities.