The crypto industry is celebrating this week as a controversial stablecoin bill dubbed the GENIUS Act advanced to debate in front of the full U.S. Senate.
Earlier this month, an Abu Dhabi investment firm announced that it would be making a $2 billion investment in the cryptocurrency exchange Binance using a brand new stablecoin called USD1.
Unlike risky cryptocurrencies with prices that fluctuate wildly and constantly, stablecoins are basically crypto tokens pegged to a more stable asset, like fiat currency such as the U.S. dollar. Crypto companies behind stablecoins typically profit based on interest rather than speculation. According to Fortune, the crypto firm behind USD1, World Liberty Financial, could make around $80 million annually off of a deal like the Abu Dhabi one.
What makes this notable? For one, World Liberty Financial is majority owned by President Donald Trump and his family. Meanwhile, a first-of-its-kind stablecoin bill has just advanced in the Senate. And although some Democrats had hoped the bill would address this type of crypto profiteering from the Trump family, the bill is moving forward regardless.
The GENIUS Act advances in Senate
On Monday, in a 66-32 vote, the U.S. Senate advanced the GENIUS Act, a bill that sets up the first regulatory framework for stablecoins. In total, 16 Democrats joined the Republican majority to advance the bill. Two Republicans joined the opposing Democrats who voted against it.
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Just two weeks ago, the stablecoin bill was shot down by every Democratic senator, which stalled the legislation from moving forward. However, an amendment was added to the bill in an effort to appease some Democrats.
That amendment included new consumer protections and regulatory limits on companies that issue stablecoins. In addition, the amendment also extended ethics standards to special government employees, which would cover Elon Musk and Trump’s AI and crypto czar David Sacks, as long as they hold their special government roles.
However, notably absent from the bill is any language that could definitively end President Trump’s own crypto and stablecoin dealings.
What are critics of the GENIUS Act saying?
The bill does include language that would “prohibit any member of Congress or senior executive branch official from issuing a payment stablecoin product during their time in public service.” However, Democrats opposing the bill say that the language doesn’t go far enough to address the Trump family’s stablecoin endeavors.
Speaking from the Senate floor, Massachusetts Senator Elizabeth Warren said, “It doesn’t have to be this way. A bill that meaningfully strengthens oversight of the stablecoin market is worth enacting. A bill that turbocharges the stablecoin market, while facilitating the President’s corruption and undermining national security, financial stability, and consumer protection is worse than no bill at all.”
In addition to the new stablecoin investment, Trump’s memecoin $TRUMP has netted his crypto companies hundreds of millions of dollars in fees. In addition, Trump has offered special access to investors in his memecoin. Memecoins are different from stablecoins and would not be covered under this bill.
While some Democrats will be offering additional legislation to cover Trump’s stablecoin project, it’s unlikely to pass the Republican-controlled Senate.