The bipartisan Stubcoin bill (Genius Act) faces the Senate obstacles due to democratic concerns over Trump’s crypto bond. Democrats cite Trump’s memocoin, stubcoin involvement, and potential binance stocks as causing problems with profit disputes. Nine Senate Democrats (including previous supporters) are currently opposed to the current form of the bill, demanding stronger safeguards.
Recently, what emerged as a rare opportunity for bipartisan agreements on cryptocurrency regulation reached a significant obstacle directly attributed to President Donald Trump’s personal and business entanglement within the digital asset sector.
Congressional Democrats have cited concerns about potential conflicts of interest and personal enrichment, and are now expressing strong reservations about moving forward with Landmark Stabilization Act, which has upset the path.
The legislation in question, the guidelines and establishment of the US’s well-established national innovation (Genius Act) in 2025, successfully demonstrated the potential rapid victory for the crypto industry in search of clarity in regulations, with support from both parties.
But momentum is stagnant as scrutiny is stronger than President Trump’s various code efforts.
These activities include the pre-inauguration launch of his own $Trump Meme coin, engagement with a new stubcoin (USD1) via Trump family-backed world Liberty Financial, proposals for major exchangeable potential family investments (linked to ABU Davi investment deals using USD1), and partnerships between Trump Media and Technology Group and Crypto.com.
Moreover, his upcoming dinner, which is exclusively for top holders of memecoin, reportedly even frowns among crypto-assisted Republicans like Sen. Cynthia Ramis.
Stablecoin Bill’s Democratic Pump Brake
The background urged nine Senate Democrats, including prominent figures who previously voted for the committee’s bill, issued a statement over the weekend, declaring they did not support the Genius Act in its current form.
Their official statement highlighted the necessary improvements, citing the need for “stronger provisions on money laundering, foreign issuers, national security, maintaining the security and soundness of the financial system, and accountability,” but other prominent Democrats have linked their opponents directly to the president’s actions.
“Since the committee voted, active efforts to benefit from President Trump’s stability and apparent opportunities for bribery and other influence have demonstrated why it is important to make meaningful substantial reforms to the bill,” Sen. Elizabeth Warren, the leading voice of the Banking Committee, said in a speech Monday.
Pushback extends beyond Stablecoin details
This resistance reflects rising Democrats’ unease about potential activities that would legalize or promote activities they believe are problematic.
Concerns are not necessarily directed towards the stubcoin regulations themselves. The Senator’s statement acknowledged that “consumers are not protected because of no regulation.”
Rather, the opposition is targeting current legislative vehicles in the specific context of the president’s obvious conflict.
Democrats don’t seem to want to advance cryptography that could lower regulatory guardrails or enable potential corruption at the highest level.
Emphasizing this sentiment, Democrat Sen. Jeff Merkley introduced the “Final Cryptocratic Act” on Tuesday.
The proposed law is intended to prohibit the president and other high-ranking federal employees from approving the issuance, sponsorship or approval of digital assets.
“Anyone who wants to develop influence with the president now can personally enrich him by purchasing cryptocurrencies he owns or manages,” Merkley argued in a statement accompanying the introduction to the bill.
Impact on broader crypto regulations
The impasse over Stablecoin Bill overshadows the outlook due to the laws of a more comprehensive crypto market structure. This has been sought by the industry for many years.
The political friction created by the president’s crypto bond makes crypto-related bills even more difficult.
Maxine Waters, a leading Democrat on the House Financial Services Committee, also opposed and resisted this week, opposed the joint hearing aimed at addressing these broader market structure issues.
Jaret Seiberg, a monetary policy analyst at TD Cowen, noted that looking at the situation primarily through a political lens, Trump’s personal interests complicate democratic support for bills that could regulate family business interests.
However, he predicted that Stablecoin Bill could ultimately pass, given the substantial political influence and resources of Crypto Lobby, potentially allowing Democrats to draw important concessions.
Meanwhile, industry lobbyists appear to be linked to momentum gaining momentum, urging lawmakers to move forward with genius, providing the necessary regulatory clarity, supporting stable recruitment, and maintaining US leadership in the digital economy.
However, the immediate future of the Stablecoin bill appears to be hostages for political fallout from the president’s controversial foray into the crypto world.
