Bipartisan efforts to pass a historic U.S. cryptocurrency bill have hit a major snag as Senate Democrats voiced opposition to the latest draft introduced by Republican lawmakers. The legislation—centered on creating the first federal framework for regulating stablecoins, digital tokens pegged to the dollar—has been a key item on former President Donald Trump’s financial policy agenda. However, nine Senate Democrats, including some who previously backed the bill, announced Saturday they could not support the revised version due to concerns about money laundering oversight and systemic financial risk.
The announcement came as a surprise to Republican negotiators, who had moved to fast-track the bill for a Senate floor vote before the end of the month. GOP aides expressed frustration at the setback but remained optimistic about eventually regaining bipartisan support. Senator Ruben Gallego (D-Ariz.), who led the Democrats’ statement, explained that Republican revisions had undone progress made in earlier negotiations. “It seems they want us to suck it up and vote for this bill without our input,” Gallego wrote on X.
Political Divide Deepens Over Crypto Regulation
The disagreement marks the latest conflict in Washington over the future of crypto regulation. While the crypto industry has gained influence on Capitol Hill, Senate Democrats remain sharply divided over its implications for national security and financial stability. Senate Majority Leader Chuck Schumer reportedly advised Democrats in a closed-door meeting to withhold support from the bill in its current form, urging lawmakers to use their leverage to push for stricter controls—particularly concerning foreign entities like Tether, the issuer of the world’s largest stablecoin.
Senator Elizabeth Warren (D-Mass.), an outspoken crypto skeptic, raised additional concerns during the same meeting about the Trump family’s expanding interests in the digital asset space. She pointed to a planned $2 billion deal involving stablecoins issued by a Trump-affiliated firm and funded by an Abu Dhabi-backed entity, warning of potential conflicts of interest. The discussion, though not originally focused on crypto, reflected growing unease among Democrats about advancing legislation that could benefit the former president’s financial ventures.
Sponsors Call for Unity, Urge Continued Negotiations
Despite the friction, some Senate Democrats continue to support the underlying goals of the bill. Senator Kirsten Gillibrand (D-N.Y.), a long-time proponent of crypto regulation and co-sponsor of the legislation, defended the proposal by highlighting improvements she helped negotiate. Her spokesperson argued that clear regulation is a better solution than maintaining the current legal ambiguity around stablecoins.
The bill’s lead sponsor, Senator Bill Hagerty (R-Tenn.), took to social media on Saturday to call for unity, emphasizing the urgency of passing legislation that could cement U.S. leadership in digital finance. “We have a choice here,” he wrote. “Move forward and make any remaining changes needed in a bipartisan way, or show that digital asset and crypto legislation remains a solely Republican issue.”
As the clock ticks toward the Senate vote, both parties face pressure to find middle ground. While Democrats insist that their resistance stems from unresolved concerns—not partisan maneuvering—Republicans argue that time is running out to establish a regulatory foundation for America’s digital asset economy.
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