Latest news with #BankingCommittee
Axios
7 days ago
- Business
- Axios
Latest Senate stablecoin bill addresses foreign issuers, national security safeguards
Since it passed out of the Banking Committee in March, Sen. Bill Hagerty's legislation on issuing stablecoins now specifically has language addressing conflicts of interest and national security protections. Why it matters: Stablecoin legislation in the Senate has addressed many of the Senate Democrats' most pressing concerns, but still carries one notable exception. The big picture: The revised version of the GENIUS Act does more to constrain stablecoin issuers to protect consumers, undermine criminal activity and secure the banking system. "GENIUS now in its current form is more prescriptive. Just in terms of specific requirements," James Rathmell, general counsel of Haun Ventures, tells Axios. Catch up quick: The original legislation that cleared banking in March (S. 394) was a slimmer bill, one that primarily dealt with issuance. The majority leader exercised a special rule to let Hagerty bring a new version to the floor, S. 1582. The Senate agreed to a motion to proceed on the bill, by a vote of 69-31. Zoom in: The details of this legislation have been shifting fast, but these are changes we can see from the published draft: One large issue has been foreign issued stablecoins, such as the world's largest, tether. In order for their stablecoins to trade among U.S. users, under the latest version, foreign stablecoin issuers will have their nation's regulatory regime assessed by the Treasury and other banking regulators for comparability with the U.S. In particular, they will need to have the technological capacity to comply with law enforcement requests, such as seizing and freezing criminal assets (the big stablecoins can do this now), as described in a more detailed anti-money laundering section than that found in the prior version. Between the lines: The teeth in the new version of GENIUS comes in how it deals with non-compliant stablecoins. After three years, no U.S.-based cryptocurrency distributors can touch non-compliant stablecoins, and significant penalties for knowing non-compliance are detailed in the current version. In addition, the new version has other language, including preventing stablecoins from offering yield (Sec. 2), requiring audits, preventing misleading marketing and slightly expanding the list of reserve assets (all in Sec. 4). Yes, but: The elephant in the room is President Trump's family crypto ventures, which have been a stumbling block for pro-crypto members of Congress. The revised GENIUS act introduced new language reiterating existing ethics rules that would prevent federal elected officials from issuing stablecoins, but those rules are generally understood to exempt the president — and enforcement has always been the key issue anyway.
Business Times
20-05-2025
- Business
- Business Times
Stablecoin bill advances in US Senate in big win for crypto
[WASHINGTON] Stablecoin legislation overcame a procedural blockade in the US Senate, marking a major victory for the crypto industry after a group of Democrats dropped their opposition on Monday (May 19). The industry-backed regulatory bill is now set for debate on the Senate floor with a bipartisan group hoping to pass it as soon as this week, although senators said a final vote could slip until after the Memorial Day recess. Democrats had united to filibuster the legislation earlier this month amid a furor over US President Donald Trump's crypto dealings along with other concerns related to the regulation of stablecoins. But the Senate voted 66-32 on Monday night to end the filibuster. Crypto-friendly Democrats led by Senators Kirsten Gillibrand of New York and Angela Alsobrooks of Maryland negotiated modifications to the legislation and urged their colleagues to support it even without a ban on Trump profiting from his family's many crypto ventures while in office. A stablecoin tied to the Trump family that has jumped to a market value exceeding US$2 billion since it was announced in March also has stirred criticism. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up But Democratic Senator Mark Warner of Virginia, an influential moderate on the Banking Committee, announced on Monday he would support the measure, adding that concerns over the Trump family's business dealings should not sideline broader stablecoin legislation. The legislation is 'not perfect but it's far better than the status quo', Warner said. Still, the party's progressive wing led by Elizabeth Warren, the top-ranking Democrat on the Senate Banking Committee, remained vehemently opposed. During the Tuesday night vote, Warren and Gillibrand engaged in a heated argument on the Senate floor. Warren released a new staff analysis attacking the bill, including the lack of any prohibitions on Trump and his family profiting off of cryptocurrencies his administration would regulate, as well as loopholes the analysis argues would allow criminals and terrorists to exploit stablecoins for transactions outside the traditional banking system. 'Passing this bill means that we can expect more anonymous buyers, big companies and foreign governments to use the president's stablecoin as both a shadowy bank account shielded from government oversight and as a way to pay off the president personally,' she said. 'For crooks, it's a two-for-one.' Warren also has repeatedly warned the bill does not have enough safeguards to prevent stablecoins from endangering the financial system's stability and that systemic risk could spur demands for taxpayer-funded bailouts if a major stablecoin fails. Unlike traditional bank accounts, stablecoins would not be covered by federal deposit insurance, leaving holders at the mercy of bankruptcy proceedings to try and get their money back if a token fails. Bankers have also expressed concern about stablecoins syphoning off bank deposits and reducing access to credit, particularly for small businesses and farmers who often rely on the banks for loans. Bankers have lobbied – mostly unsuccessfully so far – to bar commercial firms such as big tech companies or retailers from issuing their own tokens. The bankers have won some key concessions, however, including a bar on stablecoins offering interest to depositors. Coinbase chief executive officer Brian Armstrong has argued against the prohibition, envisioning stablecoin accounts as eventually evolving into replacements for bank accounts. If stablecoins were allowed to offer interest or other bonuses, that could entice more consumers to abandon banks. At the same time, Stand With Crypto, an advocacy group for the industry, said it would make the measure a 'key vote' for its scorecard of where senators stand on crypto. Some Democratic supporters of the crypto industry received US$10 million worth of support via assorted PACs and super political action committees, while the industry spent US$40 million to help defeat Senate banking chair Sherrod Brown and replace him with Republican Bernie Moreno, a blockchain entrepreneur and crypto enthusiast. Retailers also have lobbied for the bill, hoping to profit from cheaper and faster transactions than traditional payment methods including credit and debit cards. Card swipe fees cost US merchants more than US$187 billion last year, according to the Nilson Report trade publication. The House Financial Services Committee has approved its own stablecoin measure, but it has yet to pass the chamber. Some House Republicans want to merge it with a follow-on bill governing regulation of cryptocurrencies more broadly. The House and Senate will have to reconcile any differences in legislation before sending a final version to Trump's desk. BLOOMBERG
New York Times
20-05-2025
- Business
- New York Times
Senate Advances Crypto Regulation Bill With Bipartisan Support
The Senate on Monday revived a first-of-its-kind bill to regulate parts of the cryptocurrency industry, after a small number of Democrats who had joined the rest of their party in blocking the measure joined Republicans in allowing it to advance. The vote was 66 to 32 to move forward with the legislation, which would create a regulatory framework for stablecoins, a type of cryptocurrency tied to the value of an existing asset, often the U.S. dollar. Sixteen Democrats joined the majority of Republicans in support, acting over the opposition of most others in their party, who were concerned that President Trump and his family were inappropriately profiting from crypto. The vote was a victory for the cryptocurrency industry, which has made significant advances in Washington with the backing of Mr. Trump and a bipartisan group of lawmakers. It suggested that the measure would have enough support to pass the Senate and potentially make it to Mr. Trump's desk in short order. A parallel effort in the House has faced similar backlash from Democrats, who earlier this month blocked a hearing on the legislation but are unlikely to have the votes to prevent it from passing. In the Senate, a bloc of Democratic supporters had pressed in recent days to include stronger consumer protections and transparency requirements in the legislation, as well as provisions aimed at combating money laundering and terrorism financing. But the most animating worry for Democrats was that the legislation could enable the president and his family to profit by issuing their own stablecoins. Concerns over the Trump family's involvement in the industry intensified after reporting by The New York Times showed how a firm associated with the president had recently become one of the most influential players in the industry. In a prolonged round of bipartisan negotiations over the bill, Republicans steadfastly refused to consider adding any provision to rein in Mr. Trump's involvement in the industry, or make any modification that could interfere with his or his family's ability to benefit. 'This bill provides even more opportunities to reward buyers of Trump's coins with favors like tariff exemptions, pardons and government appointments,' Senator Elizabeth Warren of Massachusetts, the top Democrat on the Banking Committee, argued in a speech ahead of the vote. Still, enough Democrats were willing to join Republicans to provide the 60 votes needed for the bill to move. They argued that creating a regulatory system for the growing cryptocurrency industry was important enough to outweigh concerns about the president's conduct. 'Many senators, myself included, have very real concerns about the Trump family's use of crypto technologies to evade oversight, hide shady financial dealings, and personally profit at the expense of everyday Americans,' Senator Mark Warner of Virginia, a Democrat who serves on the Banking Committee, said in a statement ahead of the vote. But Mr. Warner called the bill a 'meaningful step forward.' 'The stablecoin market has reached nearly $250 billion, and the U.S. can't afford to keep standing on the sidelines,' Mr. Warner said. 'We need clear rules of the road to protect consumers, defend national security and support responsible innovation.' Since Democrats initially blocked the bill last week, negotiators have agreed to several modifications to win over opponents. One would place new restrictions on publicly traded technology companies, like Meta and Alphabet, requiring that they seek approval from a regulatory committee before issuing their own stablecoins. That appeared to assuage the concerns of Senator Josh Hawley, Republican of Missouri, who previously joined Democrats in voting to block the bill, citing concerns over the involvement of tech companies in crypto markets. On Monday, Mr. Hawley was absent for the vote. Among other provisions, the bill would require stablecoins, whose value is typically pegged to the dollar, to hold reserves of liquid, safe assets like Treasury bills. Issuers would also have to follow anti-money-laundering and terrorism finance rules and to give holders of coins priority to recoup their money in a bankruptcy.
Time of India
09-05-2025
- Business
- Time of India
Senator Tim Scott lashes out at Dems for putting political gains over people's benefits - The Economic Times Video
After Senate Democrats voted against a procedural step to begin consideration of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, Senate Banking Committee Chairman Tim Scott (R-S.C.) spoke on the Senate floor and called out Democrats for playing politics with bipartisan legislation. The GENIUS Act, a bill to establish the first ever regulatory framework for payment stablecoins, was the result of months of bipartisan negotiations and extensive consultation with industry participants, academic experts, and government stakeholders. After considering dozens of amendments to the bill, Chairman Scott successfully advanced the legislation out of the Banking Committee in March with every Republican and five Democrats supporting it.
New York Times
08-05-2025
- Business
- New York Times
Crypto Bill Stalls in the Senate as Democrats Balk
A first-of-its-kind bill to regulate parts of the cryptocurrency industry stalled in the Senate on Thursday, after Democrats blocked it amid concerns in their party about how President Trump and his family are profiting from crypto. On a vote of 48 to 49, the measure failed to muster the 60 votes necessary to advance. It would have regulated so-called stablecoins, a type of cryptocurrency tied to the value of an existing asset, often the U.S. dollar. The vote was a setback for the industry, which has made significant advances in Washington with the backing of Mr. Trump and a bipartisan group of lawmakers. The legislation has divided Democrats, many of whom were reluctant to back legislation that could benefit Mr. Trump, whose ties to the industry have prompted corruption allegations. As the stablecoin bill began making its way through Congress, a bipartisan group of senators on the Banking Committee supported it, voting in March to send it to the Senate floor for a full vote. At the time, the measure appeared to be on a glide path toward passage, with proponents confident they would be able to deliver a bipartisan bill to Mr. Trump's desk over the summer. But less than two weeks after the banking panel's action, reluctance began brewing among other Democrats on Capitol Hill when a cryptocurrency firm affiliated with the president's family, World Liberty Financial, announced it would issue a stablecoin. Democrats' concerns deepened after the Trump-affiliated firm inked a deal with an Emirati venture fund backed by the government of Abu Dhabi that would grant them $2 billion in deposits. Democratic backers also had concerns that the bill lacked provisions to crack down on money laundering in the industry or guarantee that bad actors who had been barred from engaging in traditional American financial markets would not be able to use the cryptocurrency to regain a foothold. But the overriding worry for Democrats, who have labored to figure out how and when to mount an effective resistance to Mr. Trump, was that they could be seen as delivering a victory to the president when they had the opportunity to block the bill. To move forward in the Senate, the legislation needed 60 votes, meaning at least seven Democrats would have to support pushing it past procedural hurdles and toward a final vote. In the end, none were willing to do so. Senator Ruben Gallego, Democrat of Arizona and a supporter of the legislation, had made a last-minute appeal to Republicans to delay the vote until Monday. 'Legislation of this scope and importance cannot be rushed,' he said, adding that he and other Democrats wanted more time to review the bill. 'I want to be clear that we do have enough members across the aisle that want to see this pass in a good manner,' Mr. Gallego said. But his efforts fell short; Republicans insisted on voting on Thursday, saying Democrats would have a chance to modify the bill during debate. 'We've done everything we can to accommodate their concerns,' Senator John Thune, Republican of South Dakota and the majority leader, said before the vote. 'At some point, they're going to have to take yes for an answer.' Mr. Thune switched his vote from a yes to a no so he could try to bring it up again in the future. He said Democrats were 'moving the goal posts' in intensive talks over the legislation, suggesting they were simply trying to deny Republicans a win on the issue. One Republican, Senator Josh Hawley of Missouri, joined Democrats in opposing moving forward with the bill, citing concerns with the involvement of technology companies in the cryptocurrency industry. 'We've been working with negotiators for 48 hours now, and I was told that they were getting close to text to include Big Tech prohibitions,' he said. 'But they haven't done it.'
