Treasury Secretary Criticizes Senate For Failing To Advance Stablecoin Bill

Treasury Secretary Scott Bessent on Friday publicly criticized the U.S. Senate’s failure to advance the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, expressing concern over the missed opportunity to establish a federal regulatory framework for stablecoins.

What Happened: “For stablecoins and other digital assets to thrive globally, the world needs American leadership,” Bessent stated.

He emphasized that the Senate’s inaction could result in stablecoins being governed by a fragmented set of state regulations, rather than a cohesive federal framework conducive to growth and competitiveness.

The GENIUS Act, introduced by Senator Bill Hagerty (R-TN), aims to provide a comprehensive regulatory structure for payment stablecoins, digital assets pegged to traditional currencies like the U.S. dollar.

The bill outlines operational standards, consumer protections, and compliance requirements with existing financial laws, including the Bank Secrecy Act.

Despite initial bipartisan support, the bill failed to secure the necessary 60 votes to end debate and proceed, with a 49-48 vote in favor.

Why It Matters: Key points of contention included concerns over foreign stablecoin oversight and anti-money laundering measures.

Notably, some Democrats withdrew support amid revelations that World Liberty Financial, a crypto firm linked to former President Donald Trump, planned to use its stablecoin in a significant investment deal with an Abu Dhabi firm for Binance.

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Senator Elizabeth Warren (D-MA) criticized the bill for potentially enabling political corruption, highlighting the need for stronger safeguards against elected officials’ involvement in stablecoin businesses.

She and other Democrats called for amendments to address money laundering, foreign issuer accountability and national security concerns.

Senate Majority Leader John Thune (R-SD) expressed disappointment over the bill’s blockage, accusing Democrats of hindering a potential bipartisan achievement.

He emphasized the importance of establishing a federal framework to maintain the U.S.’s competitive edge in financial innovation.

The failure to advance the GENIUS Act leaves the $200 billion stablecoin market in a regulatory gray area, with stakeholders urging Congress to revisit the legislation and address the highlighted concerns to ensure the U.S. remains at the forefront of digital asset innovation.

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