A battle has erupted within the Senate Democratic Conference over a bipartisan bill that would pave the way for broader commercial acceptance of cryptocurrency assets known as stablecoins, which Sen. Elizabeth Warren (D-Mass.) and other progressives warn would greatly enrich President Trump and his family.
Sixteen Senate Democrats voted Monday evening to begin debate over the Genius Act, putting it on a path to pass the Senate next month, despite the strenuous objection of Warren and other liberal colleagues.
They argue the legislation fails to impose safeguards to keep Trump and his family from benefiting handsomely from a new regulatory regime that would make stablecoins more useful and accepted in the domestic and global economies.
“The elephant in the room, of course, is how the president is launching his own stablecoin and making hundreds of millions of dollars, reportedly, and the bill does nothing to make it clear that we oppose that kind of profiteering in the president’s office,” Sen. Tina Smith (D-Minn.) said. “That’s why I voted no.”
Supporters of the legislation argue stablecoins are a growing asset class and it’s long past time for Congress to put together a regulatory framework to guide the marketplace. They also note they began work on the bill long before Trump launched his crypto investments.
“My perspective is this is an entirely unregulated industry right now, and it is a growing industry. It’s already worth $230 billion of U.S. dollar-backed stablecoins. That’s projected to grow exponentially in years to come. I think we need common sense regulation now,” said Sen. Kirsten Gillibrand (D-N.Y.), who has worked on the bill for years.
While the Senate Democrats say they want to offer amendments, once more than 60 senators agree to get on a bill, it usually passes.
Democrats voting to advance the bill Monday included Sen. Mark Warner (D-Va.), who has negotiated changes to the legislation, and Sen. Jon Ossoff (D-Ga.).
Both Democrats are up for reelection next year and know the crypto industry spent heavily last year to defeat Sen. Sherrod Brown (D-Ohio), the former chair of the Senate Banking Committee, who was viewed as a crypto skeptic.
Other Democrats who voted for the bill included Sens. John Fetterman (D-Pa.), Alex Padilla (D-Calif.), Jacky Rosen (D-Nev.) and Elissa Slotkin (D-Mich.).
Senate Democratic Leader Chuck Schumer (N.Y.), who was viewed by some colleagues as “supportive” of the bill last year, voted no.
Schumer came under intense scrutiny earlier this year after voting for a Republican-drafted bill to keep the government funded.
It’s the third time in the past several months that Democratic lawmakers find themselves deeply divided over how hard to fight back against Trump and his agenda.
Senate liberals were furious earlier this year when a group of centrists and vulnerable colleagues facing election next year broke with the rest of the Democratic caucus to help Republicans pass the Laken Riley Act.
Democrats also fought bitterly among themselves in March over whether to vote for a House Republican-drafted bill to fund government.
That legislation, which ultimately passed, included cuts to nondefense discretionary spending and didn’t put any new limits on Elon Musk’s work at the Department of Government Efficiency to shutter federal agencies and lay off federal workers.
One Democratic senator warned Tuesday that colleagues who vote for the Genius Act could feel a political backlash.
The lawmaker, who requested anonymity to comment about internal political calculations, said “you’ve got the blatant corruption of this administration and Democrats running the risk of looking like they’re providing a green light to that by voting for a bill that does nothing to stop that.”
But the senator conceded many younger voters, especially young men, are “bullish” about crypto and digital assets, and Democrats need to be careful not to alienate them.
Warren warned just before Monday’s vote that if the bill becomes law, it could multiply the value of the Trump family’s investments in cryptocurrency.
“Trump and his family have already pocketed hundreds of millions of dollars from his crypto ventures, and they stand to make hundreds of millions more [from] his stablecoin, USD1, if this bill passes,” Warren argued on the floor.
She said wealthy donors are trying to gain access to Trump and curry favor by pouring money into Trump’s meme coin, $TRUMP, as well as USD1, the stablecoin launched by World Liberty Financial, a company in which his family has a major financial stake.
The debate comes at an awkward time for Democrats after news reports that a Trump business entity owns a 60 percent stake in World Liberty, whose stablecoin will be used by a United Arab Emirates-based firm for a $2 billion investment.
In addition, Trump will hold a dinner Thursday for the top 220 holders of $Trump, which he launched in January. The value of the asset shot up after Trump invited its biggest investors to an “intimate private diner.”
“It is fitting that we are voting on the Genius Act just a few days before President Trump hosts a, quote, private, intimate dinner and VIP White House tour for the top investors in his … coin,” Warren said, asserting that some of the biggest investors in Trump’s crypto investments are foreign actors.
Warren and her progressive colleagues note the pending Senate bill would not prevent Trump and his family from benefiting from the rising value of stablecoin investments and argue stablecoins are very likely to substantially increase in value if the Genius Act becomes law.
Warren said that while members of Congress and senior administration officials would not be allowed to profit from stablecoin investments, the bill does not limit the Trump family’s business dealings.
“Donald Trump is using crypto to sell access to the White House,” she said. “Never in American history has there been corruption at the presidential level on a scale like this.”
She said the bill would make it easier for Trump to enrich himself.
“The industry estimates that if Genius passes, within three years there will be a tenfold increase in the value of stablecoins, which means Donald Trump’s efforts will be bigger, broader, more lucrative than ever,” she said.
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