Democrat Opposition to Stablecoin Bill Could Stall Momentum on Market Structure
Proponents worry the hold up might hurt other key crypto legislation
Welcome to the Monday edition of the Crypto in America newsletter!
What you’ll read: Industry advocates are raising concerns that Democrats sounding the alarm over stablecoin legislation could jeopardize the broader push to pass a market structure bill. Meanwhile, there’s renewed hope for Bitcoin legislation in Arizona — plus a look at what’s happening on the Hill this week.
Crypto advocates on Capitol Hill are growing concerned that Democrat opposition to the Senate’s stablecoin bill could stall momentum on a more consequential market structure bill — widely regarded by industry as the most significant piece of crypto legislation this Congress.
Over the weekend, ten Senate Democrats threw a landmine into Republicans’ plans to fast-track a vote on the GENIUS Act, announcing they would not support it in its current form. In a joint statement, they cited concerns over anti-money laundering gaps, national security, and financial system stability. Notably, four of the signers — Sens. Ruben Gallego (D-AZ), Mark Warner (D-VA), Andy Kim (D-NJ), and Lisa Blunt Rochester (D-DE) — had backed the bill during a March committee markup.
The move comes as Senate Republicans were preparing to tee up a procedural vote as early as Thursday. It also coincides with mounting scrutiny of President Trump’s growing ties to crypto — including reports that his family could profit heavily from a foreign fund investment linked to one of his family ventures.
“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,” longtime crypto critic Senator Elizabeth Warren tweeted on Sunday. “The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption.”
But some industry proponents believe the resistance from Democrats is more about political optics than policy substance.
“This all boils down to the Democrats finally having some leverage over the Republicans on something in Congress,” one crypto lobbyist told Crypto in America. “It’s all just posturing, but it could have real implications for whether market structure legislation can get through this session.”
Other lobbyists worry the developments could give credence to the idea being floated by some Republican lawmakers of combining stablecoin and market structure bills together, something many industry members have rallied against.
Meanwhile, it’s back to the drawing board for Senate Republicans, who are racing to reach a new agreement with Democrats before President Trump’s August deadline to have both the stablecoin and market structure bills on his desk.
“It’s going to be a long week of meetings and more hard work on the text,” a Republican Senate aide said.
Over in the House, Republican leaders are expected to unveil a discussion draft of their market structure bill as early as this week, ahead of a joint hearing with the House Agriculture Committee on Tuesday.
After Bitcoin Bill Veto, Two More Crypto Measures Await Arizona Governor's Decision
Arizona’s Democratic Governor Katie Hobbs dashed Bitcoin enthusiasts’ hopes that Arizona would become the first U.S. state to invest in the world’s largest digital currency. On Friday, Hobbs vetoed a landmark bill that would have allowed the state treasurer to allocate up to 10% of pension fund assets into digital assets. In a brief explanation for the veto, Hobbs described Bitcoin as a “truly untested investment” that has no place in the state’s retirement system.
But pro-crypto Republicans in the state legislature aren’t backing down just yet. Two more bills — one similar to the first and another — are awaiting Governor Hobbs’ decision, and one of them may have a better chance of gaining her approval.
The bill in question, HB 2749, would allow third-party exchanges like Coinbase to transfer unclaimed cryptocurrency to the state in its native form, rather than liquidating it as currently required by law. It mandates that all unclaimed crypto be held in its original form, and according to Rep. Jeff Weninger, the bill’s author, the state could establish a reserve fund using the yield generated from staking those assets. Proceeds from staking, along with any airdrops, would be directed into the reserve.
“While we’re disappointed by the veto of SB 1025, we remain optimistic about the future of HB 2749,” said Dennis Porter, founder of the Bitcoin advocacy group Satoshi Action Fund, which advised Arizona lawmakers on several Bitcoin-related bills. “This legislation presents a budget-neutral pathway for the state of Arizona to responsibly acquire bitcoin and establish the fund.”
In an interview with Crypto in America, Weninger said he remains hopeful that Hobbs will sign the bill, despite her earlier veto.
She has until Wednesday to make a decision on both bills.
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What’s Happening in Washington This Week?
Beyond the stablecoin drama, here’s what else we’re keeping an eye on this week on Capitol Hill:
Tuesday
The Senate Banking Committee will advance a vote on a handful of nominees including Federal Reserve Governor Michelle Bowman to be the next vice chair for supervision at 9:45 a.m. ET.
The House Financial Services and Agriculture Committees will hold a joint hearing at 10:00 a.m. ET. to discuss market structure legislation that’s been advancing behind the scenes. Scheduled to testify are former CFTC Chair Rostin Behnam; James Rathmell, general counsel at Haun Ventures; Alex Miller, CEO of Hiro Systems; Daniel Davis, former CFTC general counsel; and Greg Tusar, VP of institutional product at Coinbase.
Treasury Secretary Scott Bessent will appear before the House Appropriations Committee for an oversight hearing at 10:00 a.m. ET.
Wednesday
Bessent will appear before the House Financial Services Committee on the state of the international financial system at 10:00 a.m. ET.
The Federal Reserve will announce its latest interest rate decision at 2 p.m. ET, with Chair Powell’s remarks at 2:30 p.m. ET.
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