- Five Democrats joined Republicans to advance stablecoin bill.
- Crypto is striking a bipartisan chord.
- Insiders say legislation should be speedy.
A version of this story appeared in our The Guidance newsletter on March 17. Sign up here.
Five Democrats.
Of all the surprising things that happened in the crypto regulatory scene last week, the decision by five Democratic US senators to vote with Republicans on advancing a stablecoin bill tops the list.
The move was striking given how synonymous crypto has become with President Donald Trump,
Trump and his family haven’t just launched a flurry of crypto businesses, including a memecoin. The administration’s digital assets czar, David Sacks, also announced the formation of a Bitcoin strategic reserve fund two weeks ago.
Numerous flaws
Even more surprising, the Dems gave the so-called Genius Act the green light despite a clinical takedown by Senator Elizabeth Warren, the onetime Harvard Law professor and authority on consumer financial protection.
In a statement, Warren cited a number of flaws in the legislation.
Breaking from longstanding legal practice, the bill would permit convicted fraudsters and money launderers to manage stablecoin issuers, she said.
The act fails to address how pariah states such as North Korea and terrorist groups like Hamas may use US dollar-backed stablecoins to fund activities that pose a threat to national security.
As DL News has reported, North Korea is executing an unprecedented hacking operation to steal crypto and fund its nuclear weapons programme.
‘Anyone who thinks the US taxpayer won’t be called on to bail these guys out is kidding themselves.'
— Senator Elizabeth Warren
Yet the bill, the senator said, will make sanctions evasion easier by not explicitly outlawing stablecoin use by targeted entities, including drug traffickers that bring fentanyl into the US.
If that wasn’t enough, Warren said the bill would let companies such as Elon Musk’s X create their own dollar-backed currencies and operate outside the banking safeguards that protect depositors.
“And anyone who thinks the US taxpayer won’t be called on to bail these guys out is kidding themselves,” Warren said.
Shifting politics
Even with all that, five of the 11 Democrats on the Senate Banking Committee joined the Republican majority and sent the legislation to a floor vote later this spring.
The move speaks volumes about the shifting politics of crypto.
In February, Anthony Scaramucci, the well-connected hedge fund manager and crypto maven, said Democrats are running scared after the industry spent $130 million in the 2024 election campaign and notched big wins.
As a result, Scaramucci predicted that crypto legislation would fly through Congress this year.
If last week’s committee vote is anything to judge by, he’s right.
Edward Robinson is the story editor for DL News. Contact the author at ed@dlnews.com.