Sens. Schumer, Warren urged Senate Dems to change course on stablecoin bill: Politico

A new report shines more light on the recent change of course by Senate Democrats regarding bipartisan stablecoin legislation that has been working its way through the chamber. 

Late Saturday, a group of nine Senate Democrats said they would not support the bill in its current state, including four senators that voted to advance the bill from committee last month. The reversal "stunned" GOP aides involved in the talks, according to a new report from Politico, which sheds light on the behind-the-door negotiations. 

One reason for the reversal: Senate Minority Leader Chuck Schumer privately urged fellow senators at a closed-door meeting on Thursday to withhold support from the bill in order to gain more concessions from Republican lawmakers. Schumer reportedly raised concerns about how the legislation would treat Tether, the world's largest stablecoin issuer, and other foreign companies. 

Longtime crypto critic Senator Elizabeth Warren also reportedly raised concerns about passing the legislation amid the alleged conflicts of interest with Trump and his family's crypto business dealings. The "tense" meeting wasn't originally about crypto, according to the report. 

"This isn’t some reversal out of nowhere by Dems," argued Arizona Senator Ruben Gallego on X Sunday. (Gallego is one of the nine Democrats who signed on to Saturday's statement.) "The bill that was introduced for floor consideration back-pedaled on a lot of the progress we made and did not include other improvements we sought."

Still, Republicans and Democrats alike have expressed optimism that the bill can be reworked to the satisfaction of both parties. "Our statement makes clear we won’t let them jam us. Looking forward to continuing to get this bill to a better place," Gallego said. 

The bill, dubbed the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins), would require stablecoins to have 100% reserve backing with U.S. dollars and short-term treasuries (or other similarly liquid assets), monthly public disclosure of reserves, and annual audits for issuers with more than $50 billion in market capitalization. Senate Democrats are reportedly lobbying for more provisions around national security and anti-money laundering enforcement to be included in the bill.