Senate Banking Committee Chairman Tim Scott has sharply criticized partisan politics for the failure of the GENIUS Act, a key stablecoin bill he championed, during a Senate floor speech on May 8.
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act failed to reach cloture in the Senate, stalling what Scott described as a crucial step toward making financial innovation more affordable and accessible. Instead, he said, political division took center stage. Instead, we witnessed a disappointing display of political gamesmanship that puts partisan politics above policy, and obstruction above innovation, Scott stated.
GENIUS Act falters after democratic opposition
Scott, a Republican from South Carolina, noted that the bill had undergone several amendments to address Democratic concerns, including tighter regulations on stablecoin issuers and enhanced Anti-Money Laundering provisions.
Despite these changes, he criticized what he called a last-minute reversal by Democrats. According to Scott, the GENIUS Act had originally enjoyed bipartisan support in the Banking Committee and was designed to strengthen America’s financial infrastructure. The GENIUS Act was a bipartisan achievement. We made the decision to make America’s economy safer and cheaper for the American people, Scott said. But when the lights and cameras were watching, they changed their minds.
He accused Democrats of opposing the bill not on its merits, but to deny former President Donald Trump a legislative win in the digital asset space. It was a vote against President Trump. to stop him from having a victory in the digital asset space, he claimed.
Democrats cite corruption and conflicts of Interest
Democratic lawmakers pushed back, expressing deep concern over alleged corruption surrounding a Trump-linked stablecoin known as USD1.
Senator Elizabeth Warren pointed to a recent surge in the value of USD1 after a $2 billion investment by Abu Dhabi-based MGX was settled using the coin. The market cap of USD1 reportedly ballooned from $137 million to $2.13 billion in just one day, fueling suspicions of impropriety. The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption, Warren said.
Democrats have introduced multiple bills in recent weeks aimed at curbing potential abuses in the crypto sector, particularly by public officials. Among these are the Modern Emoluments and Malfeasance Enforcement (MEME) Act and the End Crypto Corruption Act, the latter of which would prohibit senior officials and their families from profiting from crypto ventures they endorse or control.
Senator Jeff Merkley, a sponsor of the End Crypto Corruption Act, warned of the dangers of such financial entanglements: This is a profoundly corrupt scheme. It endangers our national security and erodes public trust in government, he said.
Representative Maxine Waters also issued a stark warning, urging lawmakers not to support any bill that enables Trump or other officials to profit from personally held crypto assets. If there is no effort to block the President… from owning his stablecoin business. I will never be able to agree on supporting this bill,” Waters said.
In her remarks to CBS News, Warren reiterated the broader concern shared among Democrats: The GENIUS Act will simply facilitate Trump’s crypto corruption, she declared.
