Senate Democrats led by Senator Gallego opposed the advancement of the current Stubcoin bill. The concern comes with President Trump’s increased personal financial ties (Memecoin, Family-Linked Stablecoin). Legislative stalls are threatening not only with Stablecoin Bill, but also with the progress of rules for the broader crypto market structure.
The path forward for the US Senate landmark Stubcoin Act has been in great incremental steps as key Democrats express reservations that are directly linked to President Donald Trump’s growing personal and financial ties within the cryptocurrency industry.
What was recently seen as a bipartisan effort is currently facing political headwinds, which could delay not only the stable rules but also the broader market structure laws of the digital asset sector.
Over the weekend, a group of nine Senator Democrats led by Arizona Sen. Reuben Gallego showed opposition to moving forward with the current version of the major stubcoin bill known as the Guidelines and Establishment of National Innovation for Stubcoin in 2025 (Genius Law).
Their unified stance raises immediate procedural hurdles, as Senate rules typically require 60 votes to overcome filibusters and advance the law. Gallego was selected with substantial support ($10 million) especially from the crypto-centric super PAC fairshake, leading the fees to express concern.
The Senator’s official statement cited the need for stronger provisions on critical issues such as money laundering, national security and consumer protection, but sources suggest deeper concerns relating to President Trump’s potential personal financial benefits from the crypto space.
In the report, Koindsk confirmed that Senate minority leader Chuck Schumer urged Democrats to withhold their support ahead of Gallego’s announcement at last week’s Caucus meeting. Axios first reported this inside.
Trump’s Crypto Venture Raises Red Flag
The two recent developments appear to have crystallized democratic concerns in particular. First, President Trump has announced plans for a dinner exclusively for the top holders of his own brand Memecoin.
Second, Abu Dhabi investment company MGX has announced its intention to take advantage of the silly, ridiculous USD1 related to World Liberty Financial, a Trump-backed company.
As USA Today noted, these ventures suggest that Trump could personally benefit hundreds of millions of dollars from activities that could be legalized or promoted by proposed laws.
In a Meet the Press weekend interview, President Trump refused to seek personal benefits from his crypto initiative.
“I’m not profiting from anything,” he insisted. “What I’m doing is starting this long before the election. I want crypto. I think cryptography is important.
Legislative momentum hits the wall
This new dispute threatens to disrupt not only the momentum of Stablecoin Bill, but also the momentum of the planned market structure laws.
Industry stakeholders have long been clear about how the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) oversee the broader digital asset market.
Working closely with lawmakers, he told Coindesk that Stablecoin Bill might eventually pass, but the current delay could put that progress at risk.
Concerns about the potential period of this legislative slowdown and what concessions will be needed as Democrats are growing.
Sen. Elizabeth Warren, a leading Democrat on the Senate Banking Committee and a well-known code skeptic, was clear. Regarding MGX deals that include stubcoins related to Trump’s family (which Eric Trump publicly shares), she posted to Bruski that the Senate should reject a bill that “promotes this kind of corruption.”
Warren, along with Senator Jeffrey Markley, later sent a letter Monday to the U.S. Government Ethics Office urging an investigation into the MGX trade.
Resistance is not confined to the Senate. Maxine Waters, a top Democrat on the House Financial Services Committee, told the committee chair on Monday that he would block efforts to hold a joint hearing with the House Agriculture Committee aimed at addressing market structure laws.
Politics vs. Policy: Industry encourages action
Jaret Seiberg, a monetary policy analyst at TD Cowen, characterized many of the current impasses as “politics.”
In a note to his client, he observed that Trump’s personal interests make it politically difficult for Democrats to support laws that regulate the interests of his family.
Nevertheless, Seiberg predicts that Stablecoin Bill is likely to eventually pass the Senate, despite it probably not this week, given the critical lobbying capabilities and resources of the Crypto industry.
“It’s hard to see why Democrats will take on that fight when Democrats can take advantage of the key concessions from the GOP in the Stubcoin bill,” he reasoned.
The crypto industry itself appears to have been surprised by the sudden halt of momentum.
A joint statement released Monday by the Blockchain Association leaders, the Council of Crypto Innovation and the Digital Office urged senators to move forward with discussions on the Genius Act, arguing that a clear regulatory framework is essential to maintaining “dollar control in the digital economy.”
The National Venture Capital Association reiterated this call, highlighting the need for clear rules to promote innovation and support financial technology leadership.
The senator withheld support but said he “recognizes that the lack of regulations leaves consumers unprotected,” but their current stance, driven by concerns over the president’s conflict of interest, undoubtedly pumped the brakes of Washington’s cryptographic law.
