Trump’s Ties Make Crypto’s Democrat Allies Stomp Brakes on Bills
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Senate Democrats, led by Senator Ruben Gallego, are hesitating to support crucial stablecoin legislation due to concerns over President Donald Trump's personal gain from his cryptocurrency connections. Gallego and eight other Democrats have expressed reservations about advancing the proposed stablecoin bill without addressing specific issues first. This hesitation could potentially slow down progress on more significant market structure legislation.
The delay stems from Trump's reported profits from his involvement in cryptocurrencies, which have raised red flags among Democratic lawmakers. Recent announcements linking Trump's memecoin dinner and an investment in Binance using a stablecoin backed by the Trump family have heightened these concerns.
In response to this situation, Gallego and fellow Democrats have emphasized the importance of regulating the crypto industry to protect consumers and ensure financial stability. They advocate for bipartisan efforts to address various issues within the proposed bill, such as anti-money laundering measures, national security considerations, and accountability for non-compliance.
Despite these challenges, analysts predict that the Senate will ultimately pass the stablecoin legislation, although timing might be impacted. Lobbyists representing the crypto industry are urging lawmakers to engage in constructive debate on the bill to establish a supportive regulatory framework for stablecoins and bolster the dominance of the dollar in digital markets.
Trump’s Ties Make Crypto’s Democrat Allies Stomp Brakes on Bills
The Senate's stablecoin bill's issues may delay work on the far more important market structure legislation.
- Senator Ruben Gallego and eight other Democrats said they couldn't vote to advance stablecoin legislation without having certain issues addressed.
- A stalled push to move the stablecoin bill might slow down progress on the far more important market structure bill.
- U.S. President Donald Trump's crypto ties — and his profits from these ventures — are the likely cause of this momentum stall.
Moreover, Rep. Maxine Waters has indicated her intention to block joint hearings regarding market structure issues with the House Agriculture Committee due to political dynamics related to cryptocurrency regulation.
As tensions continue surrounding regulatory frameworks for cryptocurrencies, stakeholders across different sectors are closely monitoring developments in Congress as critical decisions on crypto legislation loom large.
Two recent announcements in particular may have raised Democrats' concern and led to this weekend's announcement: Trump's announcement of a dinner for the top holders of his memecoin and Abu Dhabi investment firm MGX's announcement it would use the Trump family-backed World Liberty Financial's USD1 stablecoin for an investment in Binance. Both suggest Trump himself may personally benefit to the tune of hundreds of millions of dollars, USA Today said.
Trump claimed he was not profiting from his crypto ventures during an interview with Meet the Press over the weekend.
"I’m not profiting from anything," he said. "All I’m doing is, I started this long before the election. I want crypto. I think crypto’s important because if we don’t do it, China’s going to. And it’s new, it’s very popular, it’s very hot. If you look at the market, when the market went down, that stayed much stronger than other aspects of the market. But I want crypto because a lot of people, you know millions of people want it."
Gallego's statement, which was co-signed by Democrats Mark Warner, Raphael Warnock, Lisa Blunt Rochester, Catherine Cortez Masto, Andy Kim, Ben Ray Luján, John Hickenlooper and Adam Schiff, said the lawmakers "recognize that the absence of regulation leaves consumers unprotected and vulnerable to predatory practices" and that there is a need for bipartisan legislation.
"However, the bill as it currently stands still has numerous issues that must be addressed, including adding stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system and accountability for those who don’t meet the act’s requirements," the statement said.
Gallego, Warner, Kim and Blunt Rochester had previously joined Republicans in voting to advance the bill out of the Senate Banking Committee.
"The Trump family stablecoin surged to 7th largest in the world because of a shady crypto deal with the United Arab Emirates — a foreign government that will give them a crazy amount of money," she said.
The stalling momentum isn't limited to the Senate. Earlier Monday, Rep. Maxine Waters, the leading Dem on the House Financial Services Committee, told the committee's chair she would block efforts to hold a joint hearing with the House Agriculture Committee addressing market structure issues.
"Most of this is politics," wrote Jaret Seiberg, a financial-policy analyst with TD Cowen, in a Monday note to clients. He said that Trump's personal stake in crypto is making it hard for Democrats to back the stablecoin bill that would regulate his family's business. Even so, he predicted it'll still pass the Senate, though maybe not this week.
"The crypto lobby is politically powerful and has shown a willingness to devote its considerable resources to influencing Washington," Seiberg said. "It is hard for us to see why the Democrats would take on that fight when they can leverage significant concessions from the GOP on the stablecoin bill."
Lobbyists for the crypto industry seem alarmed about the last few days' announcements: A joint statement published Monday urged lawmakers to begin floor debate on the bill.
The statement, signed by Blockchain Association's outgoing CEO Kristin Smith, the Crypto Council for Innovation's acting CEO Ji Kim and the Digital Chamber's new CEO Cody Carbone, said a real regulatory framework would support stablecoin adoption and "dollar dominance in the digital economy."
"We respectfully urge Senators to vote YES on the motion to proceed to consideration of the GENIUS Act, and move us one step closer to enacting a bipartisan stablecoin framework," the statement said.
Another lobbying organization, the National Venture Capital Association, also weighed in with a statement attributed to CEO Bobby Franklin asking the Senate to move the stablecoin bill forward.
Jesse Hamilton contributed reporting.
