Senator Tim Scott blames partisan politics for stablecoin bill failure

Senate Banking Committee Chairman Tim Scott attributed the failure of the GENIUS Act to partisan politics during a Senate speech on May 8.

The bill, aimed at creating a regulatory framework for stablecoins, failed to reach cloture in the Senate, falling short of the 60 votes required to advance.

“Instead, we witnessed a disappointing display of political gamesmanship that puts partisan politics above policy, and obstruction above innovation,” stated Scott, expressing disappointment.

He noted the bill had undergone multiple amendments to address Democratic concerns, including stricter requirements for stablecoin issuers and enhanced anti-money laundering provisions.

Scott described the GENIUS Act as a bipartisan achievement in the Banking Committee that sought to make the economy safer and cheaper for Americans.

He alleged that Democrats reversed their support not due to changes in the bill, but to block a legislative win for former President Donald Trump.

“It was a vote against President Trump and President Trump’s legislative agenda. It was a vote to stop President Trump from having a victory in the digital asset space,” he stated.

Democratic opposition centered on concerns about Trump-linked stablecoin ventures, particularly the USD1 (CRYPTO:USD1) stablecoin, which surged in market capitalisation after a $2 billion Binance investment involving Abu Dhabi-based MGX.

“The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption,” stated Senator Elizabeth Warren, criticising the bill for potentially facilitating corruption tied to Trump’s crypto dealings.

Other Democrats, including Representative Maxine Waters, voiced strong opposition unless efforts were made to block Trump’s stablecoin business.

In response, Democrats have proposed stricter crypto laws, such as the MEME Act and the End Crypto Corruption Act, targeting conflicts of interest among federal officials involving cryptocurrency.

“Democrats have been accommodated every step of the way […] frankly, I just don’t get it,” said Senate Majority Leader John Thune, criticising the Democratic opposition.

Despite the setback, bipartisan interest remains in negotiating stablecoin regulation, with motions filed to reconsider the bill’s progress.

Scott warned of “painful” political consequences for Democrats who opposed the bill and urged lawmakers to recognise the impact of delay on financial inclusion and crypto innovation.