Senate Banking Committee votes to advance stablecoin bill, collecting support from both Democrats and Republicans

The Senate Banking Committee voted to advance a monumental stablecoin bill, advancing it to the full Senate and gaining support from Democrats along the way. 

The Senate Banking Committee voted Thursday 18-6 to advance that bill.  Democrats Sens. Mark Warner and Andy Kim were among others to support the bill 

"The GENIUS Act is a bipartisan step forward in ensuring stablecoins are safe and reliable tools in the financial system," said Senate Banking Committee Chair Tim Scott, R-S.C., at the beginning of Thursday's markup. 

A handful of lawmakers in Washington have worked on a bill to regulate stablecoins for years, but those efforts, like other crypto-related bills to regulate the industry, have not come to fruition. Now, almost two months into Donald Trump's presidency, Congress is seemingly prioritizing crypto, including investigating claims of industry-wide debanking and repealing the controversial "DeFi Broker rule."

Work is also underway in the House to regulate stablecoins. Though the GENIUS Act is not a companion to the House's version, lawmakers say it shows an effort among Republicans to work on key issues.

The GENIUS Act has garnered support from some in the crypto industry, including the Blockchain Association which called the bill "a thoughtful step forward for commonsense, response guardrails for stablecoin innovation," in a post on X on Wednesday. 

On the other side of the aisle, some Democrats have expressed unease toward the GENIUS Act. Sen. Elizabeth Warren's staff circulated a memo outlining their opposition to the bill, which they say "fails" to protect consumers, competition and national security, according to Politico. The memo also includes arguments that the bill would allow firms, such as big tech companies, to issue their own currencies, Fortune reported. 

Warren offered several amendments on Thursday, including one involving firms being able to issue their own stablecoins. Big tech billionaires like Elon Musk could use their own currencies to compete with the U.S. dollar, Warren said. 

"My most pressing concern is Elon Musk's attempt to build an empire that rivals the power of most nation states," Warren later added. 

In the past, some Democrats have been critical of companies' previous plans to launch a stablecoin. Meta Platforms, formerly Facebook, looked to launch stablecoin Libra, later renamed Diem, a few years ago, but quickly prompted concern among regulators and lawmakers who were hesitant about a stablecoin with ties to the social media company.

The committee voted 13-11, therefore not agreeing to Warren's amendment. 

Tensions flare

Sen. Catherine Cortez Masto raised concerns over Democrats showing up to the markup and holding a quorum for the committee but not Republicans. 

"We're taking the time to talk about our amendments, but there's no debate," the Nevada Democrat said. "And there's some very good amendments here by the way, and I'm hopeful that we have a good product coming out of here, but it is the Democrats now holding the quorum here instead of the Republicans."

Cortez Masto called the bill a "great start" but said it was not ready for prime time.

"There are many that want to provide a good product at the end of the day, but it looks like to me — the die is already cast, you get what you get," she said. 

Sen. Warren called the markup a "show trial" and criticized the lack of debate. However, Warren also showed willingness to work on the bill and said it had a "strong base." 

"This feels like show trial here that we get up and we read our little part about each of the amendments and the Republicans, clearly a majority of the Republicans have already decided their vote without even hearing anyone make an argument for why this might be an amendment that would be appropriate for this bill," Warren said. 

Sen. Bill Hagerty, one of the authors of the bill, countered and said the bill had gone through a "very robust bipartisan process."

"We're going to continue to work to improve this," he said. "I've already acknowledged my willingness to do that here today to the extent that there are additional technical corrections, or in many cases, valid issues are being raised that I think are far more appropriate for a market structure piece of legislation."

In the House, Rep. Stephen Lynch, D-Mass., criticized the GENIUS Act on Tuesday during a hearing focused on stablecoins and said it needed to be amended "vigorously."

"I read the GENIUS Act over in the Senate — I'm a little weary about anything called genius coming out of the United States Senate — but there were so many problems with that and I'm hopeful, hopefully my colleagues, Mr. Hill, and others will amend that vigorously because it had huge, huge problems," Lynch said

Following the hearing, there is still a clear path to getting the 60 needed votes in the Senate, investment bank TD Cowen's Washington Research Group, led by Jaret Seiberg, wrote in a note on Thursday. However, partisan divides shown during the hearing does not bode well for crypto market structure legislation down the road, Seiberg said, in part due to its complexity.

"Our view is that Senate Banking Chair Scott will need a more open markup to advance crypto market structure legislation," Seiberg said. "That means votes and debate on substantive amendments rather than the party-line control we saw in this markup." 

Update: March 13, 7:15 p.m. UTC to include comments from TD Cowen