Senate Democrats retract backing, placing crypto bill's journey in peril due to stablecoin standoff.
United Front Collapsing: Nine Senate Democrats Threaten to Block Landmark Stablecoin Bill
A shocking statement from a group of nine Senate Democrats who were once in favor of crypto-friendly legislation has shaken the upcoming landmark stablecoin bill. This shift signals widening disagreements regarding the regulation of the rapidly expanding digital asset sector.
Back in March, these senators, including Sens. Ruben Gallego (Ariz.), Mark Warner (Va.), Lisa Blunt Rochester (Del.), and Andy Kim (N.J.), had supported the bill as it passed the Senate Banking Committee. However, they now assert that the legislation still has numerous issues that require resolution.
The Senators' demands primarily focus on several key areas: reinforcing barriers to prevent illicit financial flows, implementing stricter regulations for overseas stablecoin suppliers, prioritizing national security, ensuring stablecoins won't disrupt the stability of traditional financial systems, and imposing tougher penalties on non-compliant actors.
The turnaround comes shortly before the chamber is anticipated to hold a procedural vote on the legislation. This bill intends to create the first federal framework for stablecoin issuers – digital tokens usually pegged to the U.S. dollar or other assets.
Who's On Board? Who's Off?Notably absent from the statement are the two Democratic co-sponsors of the bill: Sen. Kirsten Gillibrand (N.Y.) and Sen. Angela Alsobrooks (Md.).
Responding to the pushback, the bill's lead sponsor, Sen. Bill Hagerty (R-Tenn.), issued a warning and a challenge. He underscored the importance of collaborating bipartisanly to strengthen the U.S.'s dominance in the digital asset space, emphasizing the choice between moving forward together or leaving digital asset and crypto legislation as a Republican-led issue.
The defecting Democrats may now exert leverage to reform crucial provisions or potentially halt one of the crypto industry's most significant regulatory advancements to date.
Weekly Overview: Strategy Swells Bitcoin War Chest, Nexo Returns to US, Ex-Celsius CEO Faces 20 Years
Enrichment Data:- Lack of Clear Safeguards Against Money Laundering: The Democrats have expressed concerns that the bill lacks sufficient anti-money laundering (AML) measures, which they view as a critical issue[4][5].- Potential Conflicts of Interest: The emergence of substantial investment in a Trump family-linked crypto company is causing worries about potential conflicts of interest, leading to demands for legislation prohibiting elected officials and their families from dealing in crypto assets[2].- Unresolved Issues: The Democrats have highlighted that the bill, as it stands, contains various unresolved issues, making it challenging for them to support it in its current form[3][4]. These concerns have led to a shift in support from some Democrats, casting doubt over the bill's passage in the Senate[3][5].
- The Democrats' concerns regarding the stablecoin bill include lacking clear safeguards against money laundering and potential conflicts of interest.
- The shift in support from nine Senate Democrats, who had initially supported the bill, is due to the legislation's numerous unresolved issues.
- In response to the pushback, Sen. Bill Hagerty, the bill's lead sponsor, emphasized the importance of bipartisan collaboration to strengthen the U.S.'s dominance in the digital asset space.
- The defecting Democrats may exert leverage to reform crucial provisions or potentially halt one of the crypto industry's most significant regulatory advancements to date.
- The rapidly expanding digital asset sector, including assets like Bitcoin, ICOs, Tron, tokens, and DEXs, depends on the outcome of this landmark stablecoin bill, which faces challenges due to widening disagreements on its regulation.
