US Senate passes stablecoin Bill in win for crypto industry, Trump
The US Senate passed stablecoin legislation setting up regulatory rules for cryptocurrencies pegged to the dollar. PHOTO: REUTERS
WASHINGTON - The US Senate passed stablecoin legislation setting up regulatory rules for cryptocurrencies pegged to the dollar, in a landmark win for the ascendant crypto industry and President Donald Trump.
The 68-30 vote on June 17 evening marked a rare moment of bipartisanship in the deeply divided Senate, despite Republicans blocking Democratic efforts to bar Trump from profiting from his many crypto ventures while in office.
A Trump-affiliated stablecoin already has a US$2 billion (S$2.6 billion) market value.
The House has been pursuing its own legislation, including a more sweeping measure to regulate the broader crypto market. House lawmakers must now decide whether to take up the Senate Bill or negotiate a compromise measure.
The stablecoin vote, years in the making, is the crypto industry's most tangible return yet on the hundreds of millions of dollars it poured into electing a crypto-friendly Congress. Crypto titans who flooded money into the 2024 election with the best-funded alliance of corporate political action committees in US history have similar plans for the 2026 midterm elections.
Dollar-pegged stablecoins would have to hold dollar-for-dollar reserves in short-term government debt or similar products overseen by state or federal regulators.
Industry backers hope the legislation will turn stablecoins into a mainstream form of payment. Retailers had signed on to the bill with the idea that they can provide a cheaper, faster way to process transactions than traditional banking products like credit cards and checks.
Banks, especially smaller ones, have warned about a potential drain on deposits and reduced access to credit. Larger banks are considering issuing their own stablecoins, which generate profits from interest on the reserves.
Stablecoins are already a lucrative business, with leading issuer Tether Holdings SA earning billions on its reserves.
Technology companies and other large non-financial businesses could also issue their own stablecoins if the Bill becomes law, potentially upending a longstanding separating of finance and business.
Various efforts to amend the measure on the Senate floor failed, including amendments targeting Mr Trump, credit card competition, consumer protections and the threat of future government bailouts of stablecoins, which would not be protected by federal deposit insurance.
Senate Banking Committee Chairman Tim Scott, a South Carolina Republican, has told Bloomberg he expects to hold a hearing on a broader crypto market structure Bill in July, but does not anticipate passing it in the Senate until the fall.
Backers, including the president and Treasury Secretary Scott Bessent, have touted dollar-pegged stablecoins for their potential to increase demand for dollars and US debt globally.
Several Democrats led by Senator Elizabeth Warren argued that the stablecoin bill doesn't do enough to protect consumers and the financial system if issuers fail, leaving customers vulnerable to losing their money and fueling demands for taxpayer bailouts. They also take a dim view of advancing legislation that would not bar Mr Trump's crypto profiteering.
Senator Bill Hagerty, a Tennessee Republican and his party's lead sponsor of the measure, said he'd spoken with Mr Trump and that he was looking forward to getting the legislation on his desk 'in very short order'.
The senator added that he hoped the House passes the Bill 'as quickly as they possibly can.' BLOOMBERG
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