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US Senators prepare for a new vote on the highly anticipated stablecoin bill that recently failed to pass cloture. After facing backlash and support withdrawal from Senate Democrats, the bill has undergone new bipartisan amendments to advance the legislation in the upcoming weeks.
Stablecoin Bill To Face Second Cloture Motion
A week after failing to pass the US Senate vote, Senator John Thune has filed cloture on the amended Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act following bipartisan efforts to revive the legislation.
The bill, sponsored by Republican Senator Bill Hagerty, failed to pass the cloture motion on May 8 after several lawmakers, including two Republican senators, withdrew their support ahead of the vote.
Notably, the stablecoin legislation only received 49 favorable votes when the process requires 60 senators to agree to advance the legislation to an open floor debate. Before last week’s failure, the GENIUS Act was considered a bipartisan effort to offer regulatory clarity, with various Senate Democrats supporting the bill.
The bill underwent various amendments to address Democratic senators’ concerns, including stricter requirements for stablecoin issuers and Anti-Money Laundering (AML) provisions. However, in an opposition statement, ten senators, including four Democrats who previously supported the bill, criticized the revised version of the legislation.
The lawmakers suggested that the draft omitted essential AML and national security safeguards and had ambiguous regulations that could expose crypto markets to exploitation, which led to its failure.
Now, journalist and podcast host Eleanor Terret reports that Senator Thune filed for a second cloture motion on May 15, with a vote scheduled for Monday evening after various amendments to address the Democrats’ concerns.
Bipartisan Amendments Could Not Be Enough
As reported by Bitcoinist, the US senators from both parties were working to “quickly revive” the stablecoin legislation since the May 8 failure.
The bill’s sponsor, Senator Hagerty, recently told Bloomberg that staff from the two parties had continued to work on the GENIUS Act, hoping that Senate Democrats would agree to pass the bill before the Memorial Day holiday, on May 26.
The most recent bipartisan amended version of the stablecoin legislation reportedly includes new language regarding consumer protection, ethics, limitations on Big Tech issuers, among other provisions.
According to a draft page shared by Terret, the bill now prohibits non-financial publicly traded companies, like Meta, Amazon, Google, and Microsoft, from issuing a stablecoin unless they meet strict criteria related to financial risks, consumer data, and fair business practices, to maintain “the separation between banking and commerce.”
Additionally, it establishes that issuers can’t use US-related branding, prohibiting terms like “United States,” “United States Government,” or “USG” in the stablecoin’s name to prevent consumers’ confusion with a US-backed token. This directly responds to Senator Elizabeth Warren’s concerns about potential “crypto corruption.”
The bill expanded the Ethics Coverage for Special Government Employees, adding that regular and special government employees, including Elon Musk and the White House’s AI & Crypto Czar, David Sacks, are uniformly subject to conflicts of interest procedures.
Meanwhile, the bipartisan amendments also strengthen the Treasury Department’s enforcement capabilities, securing the agency’s “ability to suspend an issuer’s registration after both reckless and willful violations.”
Despite the changes, a recent memo from Democratic staff on the Senate Banking Committee suggests that the amendments are insufficient for the bill to pass the vote next week, as “many of the new changes are fig leaves for significant flaws that jeopardize consumer protection and national security.”
The Democrats’ Thursday analysis affirms that the “current draft paves the way for more Trump crypto corruption,” expanding a “giant national security loophole for Tether,” and still permitting Big Tech companies to issue a stablecoin while failing to address several other “fundamental flaws.”
Featured Image from Unsplash.com, Chart from TradingView.com
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