Senate lines up major step toward passing stablecoin bill

The Hill

a day ago

The Senate is poised to hold another key procedural vote on stablecoin legislation Wednesday, clearing the way for the crypto bill after several controversial amendments threatened to complicate its path forward.
Senate Majority Leader John Thune (R-S.D.) moved to end debate Monday on the updated text of the GENIUS Act, struck as part of a bipartisan agreement after two weeks of frantic negotiations last month between Republicans and crypto-friendly Democrats.
The move appears to end Thune's push to pass the bill via so-called 'regular order,' which would have opened up floor proceedings on the stablecoin legislation to dozens of amendments in a lengthy process that risked derailing final passage.
'I think at this point it's a good thing, because the longer it sat around, the more people picked at it, and it would have died from death by 1000 cuts, if we would have waited longer,' Sen. Cynthia Lummis (R-Wyo.) told The Hill on Tuesday.
'And I think that Sen. Thune was seeing that, and so he decided to move forward just with the changes that were made in negotiations with the Democrats,' she continued, noting that she expects the updated text to be the final version of the bill.
A Senate aide said Tuesday that no final decision had been made yet on amendments but underscored that the timeframe was shrinking ahead of Wednesday's vote.
A key point of contention has been the Credit Card Competition Act (CCCA), which Sen. Roger Marshall (R-Kan.) offered up as an amendment. However, it seems increasingly unlikely that the bill will get a vote as part of the GENIUS Act.
'There's a couple of GOP Senators who wish to avoid a vote on CCCA at all costs, and an open amendment process on this was a major threat to that end,' a senior GOP staffer familiar with what transpired told The Hill.
'Obviously, Leader Thune ran the calculus, and ultimately decided to toss the process out in order to move on Genius,' they continued. 'There's very little Senator Marshall can do at this point, disappointed as he likely is.'
The CCCA seeks to take aim at credit card swipe fees — the fees charged to retailers every time a customer swipes a credit card. Marshall and his Democratic co-sponsor, Sen. Dick Durbin (Ill.), have argued Visa and Mastercard have a duopoly over the credit card market, leading to higher swipe fees.
Their proposal would require large financial institutions to provide an option other than Visa or Mastercard to process credit card transactions.
The legislation has been the subject of fierce lobbying. While retailers have embraced the bill, the credit card industry has aggressively opposed the measure, arguing it would enrich major retailers and force credit card companies to do away with popular rewards programs.
'The Credit Card Competition Act has been controversial for a while in D.C.,' said Christopher Niebuhr, a senior research analyst at Beacon Policy Advisors.
'The inclusion of the Credit Card Competition Act as an amendment, were it to get an amendment vote, would certainly add a little bit of risk or uncertainty as to the path forward for the GENIUS Act,' he added.
Lummis suggested Tuesday part of the push to include other measures in the stablecoin bill stems from a lack of movement on legislation in the Senate Banking Committee over the years.
'This is the first bill that's been reported out of the Banking Committee in eight years,' she said. 'So, there was a lot of pent-up desire to append other legislation that was financial services related to this bill. Some of that legislation is kind of controversial, so I get it.'
'I get why people are frustrated that they haven't had an opportunity to have their financial service related legislation heard,' she continued. 'But there will be other legislation that will come out of the Banking Committee, so they'll have other chances.'
While some GOP senators may be breathing a sigh of relief, the decision to move forward on the GENIUS Act without an open amendment process is raising questions for some Democrats, including those who initially supported the bill with the hopes of making changes down the line.
'I was glad about some of the bipartisan progress that had been made,' Sen. Lisa Blunt Rochester (D-Del.) told The Hill. 'It was one of the reasons I voted the bill out of committee in the first place, was with the agreement that there would be amendments.'
Blunt Rochester was one of five Democrats who joined their Republican colleague to vote the legislation out of the Senate Banking Committee in March. She and 15 other Democrats also supported the GENIUS Act in a procedural vote on the Senate floor last month.
However, she noted at the time that she wanted to see further changes to protect consumers and the stability of the financial system, as well as to prevent fraud and address President Trump's growing ties to the crypto industry.
'I was really clear,' Blunt Rochester added Tuesday. 'I hoped that there would be an open amendment process, and that's what I heard Leader Thune say around last month, so I will take a look at this language, and we'll make a decision from there.'
Thune repeatedly emphasized last month that he planned to move the GENIUS Act through the Senate via 'regular order,' allowing for an open amendment process on the floor.
This was central to his criticism of Democrats, who initially blocked the legislation from moving forward on the Senate floor in early May.
When Thune first sought to expedite the stablecoin bill, a contingent of crypto-friendly Democrats pulled their support, alleging Republicans had prematurely cut off negotiations and ultimately voting down a motion to advance the bill.
The Senate majority leader slammed Democrats at the time, arguing they would have a chance to make changes on the floor.
'All they had to do was vote for cloture. Not every bill that comes to the floor is a final bill. Now, that might be how it worked when they were in control, but Republicans are doing it differently,' Thune said in early May.
Sen. Elizabeth Warren (D-Mass.), a fierce crypto critic who has opposed the bill, warned Tuesday that limiting amendments could undermine support for the legislation.
'Sen. Thune has repeatedly promised that he would open up the legislative process for amendments, and this is his first chance to do that, and he's gone back on his promise,' Warren told The Hill.
'It is possible that there will be people who will say that they voted to advance the bill, but without amendments, they can't do that anymore,' she added.
However, lead Democratic negotiators on the GENIUS Act have underscored the wins they secured through discussions Republicans.
'I think we have worked hard to incorporate many of the concerns that we have heard from our colleagues,' Sen. Angela Alsobrooks (D-Md.) told The Hill on Tuesday, adding, 'We had many, many amendments along the way that have been incorporated. Always we would like to have more, but it was a really solidly bipartisan effort.'