A crypto comeback in the Senate

Politico

19-05-2025

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Quick Fix
Landmark cryptocurrency legislation has risen from the dead in the U.S. Senate.
Less than two weeks after a GOP-led stablecoin bill bombed on the Senate floor, Republican leaders are preparing to put the legislation back up for a key procedural vote as soon as Monday that could pave the way for the upper chamber to soon pass its first-ever major crypto regulatory overhaul.
The stablecoin bill, led by Sen. Bill Hagerty (R-Tenn.), has been the subject of a chaotic series of bipartisan negotiations over the past two weeks, with Republicans seeking to win over enough Democrats to clear the 60-vote threshold required to pass the legislation. As your MM host reported Sunday, negotiators circulated revised text this weekend that included concessions won by Democrats throughout the talks, which could finally unlock the votes to advance the bill, known as the GENIUS Act.
The tentative deal — which could change further with amendments on the floor — represents a remarkable breakthrough that has suddenly turned around the crypto bill's prospects. The legislation appeared to be on ice just days ago after Democrats enraged GOP negotiators by voting down a procedural motion on the floor over objections to the previous revised version of the legislation that Republicans introduced.
It will now hit the floor again as soon as this evening for the procedural vote that would allow GOP leaders to put it up for final passage. The vote will be on a previous version of the bill, but senators would be expected to adopt an amendment on the floor before it goes up for final passage that would replace the existing base text with the final deal that negotiators land on.
Several big questions are lingering.
First, it is unclear how many votes the stablecoin bill will be able to draw on the floor. Nine Democrats previously signaled interest in supporting the bill, but not all have been directly involved in negotiations.
Talks have been led on the Democratic side by Sens. Kirsten Gillibrand of New York, Angela Alsobrooks of Maryland, Ruben Gallego of Arizona and Mark Warner of Virginia. Those lawmakers are gearing up to support the procedural motion, and while it is likely they will bring along enough other Democrats to advance the measure, it is unclear how many they will get. One major question is how Minority Leader Chuck Schumer (D-N.Y.) will vote: He has embraced crypto over the past year, but the legislation still faces strong opposition from some in his caucus.
'We have worked to make sure we've got as many things done as possible,' Alsobrooks told reporters Friday. 'I feel very good about all of the issues that we were able to address.'
Schumer convened a conference call with Senate Democrats about the stablecoin bill on Sunday afternoon. Members of the party will be facing pressure from the left to oppose the bill, with the Democratic leader on the Senate Banking Committee, Elizabeth Warren of Massachusetts, heading the opposition. Expect her to focus on President Donald Trump's conflicts of interest in crypto, which some Democrats have called for the legislation to directly address. Her office circulated a memo Friday saying the stablecoin bill would 'Fuel Trump's Crypto Corruption.' (Trump is promoting a memecoin and his sons launched a crypto company last year that is now issuing a stablecoin.)
Gillibrand said at an event hosted by Coinbase last week that 'a lot of what President Trump is engaged in is already illegal.'
'I'm not so worried about this bill having to deal with all President Trump's ethics problems,' she said during a panel put on by Semafor at the event. 'What this bill is really intended to do is to regulate the entire space of stablecoins so that if someone is an issuer, that they actually have to follow the rules.'
One other X factor to watch is the amendment process on the floor. Negotiators could hammer out more agreements on bipartisan amendments that could change the bill further, but the process could also include other payment-related provisions that are germane to the bill (think of issues like credit card swipe fees).
That could open the door to some tough — and fascinating — amendment votes. But Senate Majority Leader John Thune (R-S.D.) has signaled that he wouldn't move ahead on the bill without commitments that he would have the votes to kill any poison pill provisions.
'Once they can agree on what they want it to look like and we think there's more than 60 to pass it on the floor, there's a group of people on that side who just want to blow it up, and they'll try to do that on the floor,' he told reporters last week. 'So we need to know that there will be the votes to defeat … amendments.'
IT'S MONDAY — What do you think about the stablecoin bill's prospects? Let me know — and send other Capitol Hill tips — to [e-mail]. As always, send your tips, suggestions and personnel moves to Sam at [e-mail].
Driving the Week
Monday … SEC Chair Paul Atkins and Commissioners Mark Uyeda, Hester Peirce and Caroline Crenshaw speak at the Practising Law Institute's 'SEC Speaks' conference beginning at 8:30 a.m. … Federal Reserve Vice Chair Philip Jefferson speaks at the Atlanta Fed's Financial Markets Conference at 8:45 a.m. …
Tuesday … Senate Finance holds a hearing on the nomination of Billy Long to be IRS commissioner at 10 a.m. … SEC Chair Atkins testifies at a House Appropriations oversight hearing at 10 a.m. … The Peterson Institute for International Economics holds a virtual discussion on 'Immigration and the U.S. Economy' at 10 a.m. … House Financial Services kicks off a two-day markup at 10 a.m. … The American Enterprise Institute holds a discussion on 'Immigration and the Macroeconomy' at 12 p.m. … Fed Governor Adriana Kugler speaks at the U.C. Berkeley Economics Department's commencement at 5 p.m. …
Wednesday … The Peterson Institute holds a virtual discussion on tariffs at 9 a.m. … Senate Small Business holds a hearing on 'Fueling America's Manufacturing Comeback' at 10 a.m. … FCC Chair Brendan Carr testifies at a House Appropriations oversight hearing at 10 a.m. …
Thursday … Small Business Administration Administrator Kelly Loeffler speaks at a Punchbowl event at 9 a.m. … Senate Banking holds a hearing on the Defense Production Act at 10 a.m. … Existing home sales data out at 10 a.m. …
Friday … New home sales data is out at 10 a.m. … Fed Governor Lisa Cook speaks about financial stability at a Women in Macro conference at noon …
Blaming Biden — Treasury Secretary Scott Bessent sought to downplay Moody's Ratings Service's move last week to downgrade the U.S. credit rating, calling it a 'lagging indicator,' in an interview on NBC's Meet the Press.
'It's the Biden administration and the spending that we have seen over the past four years that we inherited 6.7 percent deficit to GDP, the highest when we weren't in a recession, not in a war,' he told host Kristen Welker. 'And we are determined to bring the spending down and grow the economy.'
As our Victoria Guida reported on Friday, the downgrade, which puts the U.S. one notch below the highest credit rating, was 'driven mainly by increased interest payments on debt, rising entitlement spending, and relatively low revenue generation,' Moody's said.
It comes as congressional Republicans are rushing to pass Trump's 'big, beautiful bill' that would extend 2017 tax cuts, with some hard-line conservatives fighting to limit the increase to federal deficits. But those deficits would increase even under conditions outlined by that group.
—To that end, the Yale Budget Lab is out with a new analysis that says the tax component of the reconciliation bill would add $3.4 trillion to the debt between 2025 and 2034, and $15.3 trillion between 2025 and 2055.
At the regulators
First in MM: FHFA rescinds Biden-era equity pilots at FHLBs — From our Katy O'Donnell: Federal Housing Finance Agency Director Bill Pulte has rescinded a Biden-era order directing the nation's 11 Federal Home Loan Banks to devise pilot programs advancing racial equity, according to a copy of a May 14 order reviewed by POLITICO.
The banks had been ordered to 'develop innovative pilot programs, and offer voluntary programs, to increase prudently their support for affordable housing, equity advancement, and community development for underserved and financially vulnerable populations in their districts,' in the agency's now-rescinded November 2023 bulletin.
Such programs, the agency added at the time, could be designed to 'help close racial homeownership gaps [or] address residential climate resiliency improvements.'
'The Federal Home Loan Banks will be lending money to businesses, not 'climate change,' and our Banks will help ALL Americans, not just those of a certain skin color,' Pulte said. 'The Federal Home Loan Banks will keep the money flowing to local communities as we work to reverse the last four years of Biden's inflation, which devastated housing affordability.'
Pulte scrapped similar programs at Fannie Mae and Freddie Mac in March. The Trump administration more broadly has sought to stamp out 'diversity, equity and inclusion' initiatives across the federal government.
Appeals panel probes CFPB union's case — Katy also reports that two judges on a three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit expressed skepticism Friday about claims brought by the Consumer Financial Protection Bureau employee union against the Trump administration.
SEC X hack — Our Declan Harty reports that an Alabama man was sentenced to 14 months in prison for hacking into the SEC's account on X last year in a scheme to send the price of bitcoin soaring, the Justice Department said Friday.
CGR out — CFTC Commissioner Christy Goldsmith Romero said Friday that she will leave the U.S. derivatives watchdog at the end of the month, Declan also reports.
trade
Deals — Bessent on Sunday said the U.S. still intends to strike a series of trade deals across the world, even as the administration is limited in how many countries it can negotiate with at once, Victoria reports. In an interview with CNN's 'State of the Union,' Bessent said the U.S. is focused on negotiating tariffs with 18 'important' trading partners. But he also suggested that many countries won't end up with their own individual deals.
Outside the Beltway — Trump has claimed his surge of new tariffs will produce trillions of dollars of foreign investments in the U.S. economy. But some of the people working to lure those investments to U.S. cities and states say they're not seeing the investment boom, at least not so far, our Daniel Desrochers reports.