US stablecoin bill called “GENIUS Act” blocked after Democrats pull support over Trump crypto concerns

An effort to establish the first U.S. regulatory framework for stablecoins collapsed in the Senate on Wednesday after Democrats withdrew their support, citing concerns over President Donald Trump’s cryptocurrency activities.

The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act failed to clear the 60-vote threshold needed to advance in a 49-48 procedural vote.

Senators Rand Paul and Josh Hawley broke ranks with Republicans to join Democrats in opposition.

The bill, aimed at regulating stablecoins, digital assets pegged to the U.S. dollar, had been seen as a rare bipartisan push to provide clarity in the fast-growing crypto sector.

Backed by Senators Bill Hagerty (R-TN), Tim Scott (R-SC), Kirsten Gillibrand (D-NY), Cynthia Lummis (R-WY), and Angela Alsobrooks (D-MD), the bill advanced out of the Senate Banking Committee earlier this year with five Democratic votes.

But in recent days, Democrats raised alarms over the bill’s perceived loopholes, including the risk of boosting Trump’s crypto interests, insufficient anti-money laundering provisions, and gaps in consumer protections.

Senate Majority Leader John Thune (R-SD) blasted Democrats after the failed vote, saying, “Democrats have been accommodated every step of the way. Frankly, I just don’t get it.”

Senator Elizabeth Warren (D-MA), one of the bill’s fiercest critics, warned that the legislation as written would "supercharge Donald Trump’s corruption," undermine national security, weaken consumer protections, and expose taxpayers to future bailouts.

“The only version of this bill that we have seen is one that the Republicans put out,” Warren said. “We cannot allow this to become another giveaway to the rich while putting everyday Americans at risk.”

Earlier this week, nine Senate Democrats who had been open to supporting the bill sent a letter demanding further changes. They called for stronger anti-money laundering measures, tighter oversight on foreign issuers, and increased accountability for violators.

While Republican leaders urged the Senate to advance the bill and continue negotiations afterward, Democrats refused, insisting the text was not ready. Senator Mark Warner (D-VA), a lead negotiator, said, “The work is not yet complete, and I cannot in good conscience ask my colleagues to vote for unfinished legislation.”

Senator Ruben Gallego (D-AZ) had requested a delay until next week to finalize the bill, but Republicans declined, opting to proceed with the vote.

Despite the setback, some remain optimistic. Blockchain Association CEO Kristin Smith said the bipartisan momentum is encouraging, even if the outcome was disappointing. Treasury Secretary Scott Bessent echoed those sentiments, emphasizing the need for U.S. leadership in digital asset regulation.

Meanwhile, some Democrats introduced the End Crypto Corruption Act, which would bar top government officials and their families from promoting or launching cryptocurrencies, a direct response to concerns over Trump’s involvement in the sector.

As negotiations stall, both sides agree on the urgency of regulating stablecoins but remain divided on how to get it done.