The GENIUS Act, a bill designed to regulate stablecoins and permit Big Tech to issue private currencies, has encountered unexpected delays despite strong crypto industry backing in the 2024 elections.
The initiative, seen as a major reshaping of the financial system favoring crypto interests, faced initial challenges due to controversies around former President Donald Trump’s crypto ventures. While Democrats tried to mitigate these concerns with a symbolic amendment barring presidents from issuing crypto assets, the bill still advanced with bipartisan support.
However, final passage stalled, largely because of opposition from community banks and internal Senate disagreements rather than a shift in Democratic support. State banking groups in Illinois and Texas voiced strong resistance, fearing that legitimizing stablecoin issuers without equivalent bank regulations would threaten their business models.
Senate Majority Leader John Thune’s commitment to “regular order”—allowing open amendments on the Senate floor—gave rise to a contentious amendment using the Credit Card Competition Act (CCCA) proposed by Sen. Roger Marshall (R-KS). The CCCA intends to foster competition against Visa and Mastercard by requiring banks to offer alternative credit card processing options, which has alarmed banks, credit unions, and credit card companies allied with industries like airlines.
Efforts by banks and credit card firms to oppose the amendment, including gaining Vice President JD Vance’s support for a “clean” GENIUS Act, have complicated legislative progress. Senators are reluctant to vote on the CCCA due to potential political fallout and campaign fundraising concerns. The CCCA amendment is considered a possible “poison pill” that could collapse the entire bill.
This stalemate delays the GENIUS Act amid growing criticism from media and financial experts warning the bill could enable scams, money laundering, and financial instability reminiscent of pre-Federal Reserve crises. Meanwhile, the shadow of Trump’s crypto involvement weakens support among some lawmakers, including Sen. Josh Hawley (R-MO), who is now unlikely to approve final passage.
The Senate faces additional legislative pressures, including a Trump-era rescission package, a Russia sanctions bill, and a looming July 4 deadline for a major tax-and-spend bill, leaving little room to resolve the GENIUS Act impasse quickly.
Further complicating matters, the GENIUS Act is part of a broader crypto legislative effort that includes a market structure bill aiming to shift regulatory authority from the SEC to the Commodity Futures Trading Commission. This market structure bill is encountering resistance within the House Financial Services Committee, where Democrats have distanced themselves amid concerns over perceived corruption tied to Trump’s crypto dealings.
The intertwined nature of these bills means delays in one area could stall the entire crypto regulatory agenda, undermining industry efforts despite significant political investments. The unexpected legislative hurdles highlight the complexities of governing compared to campaigning within the crypto regulatory space.