Since Trump returned to the White House, the stablecoin bill, which has been under close attention and can be described as smooth sailing, has recently encountered a setback. The ‘GENIUS Act’, or the ‘Guidance and Establishment of the US Stablecoin National Innovation Act’, is a legislation proposed by the US Senate on February 4, 2025, aimed at establishing a comprehensive regulatory framework for ‘payment stablecoins’ within the United States to promote financial innovation, protect consumers, prevent illegal financial activities, and consolidate the dominant position of the US dollar in the global financial system.

This milestone cryptocurrency bill has encountered unexpected obstacles in negotiations, with nine key Democratic senators in the Senate publicly stating on May 3 that they refuse to support the revised version proposed by the Republicans last week. On May 9, the Senate rejected the ‘Stablecoin Innovation and Security Act’ by 48:49, with Democrats collectively voting against advancing the bill. The bill aimed to establish the first federal regulatory framework for stablecoins pegged to the US dollar, which is one of the focal points of the Trump administration’s crypto policy.

Also today, the long-running case between Ripple and the SEC finally came to a conclusion. The connection between Ripple and the US political groups has been pushed into the spotlight by the Democrats, who openly emphasize the need to prohibit the Trump group from participating in cryptocurrencies. With conflicting interests and partisan struggles, can Trump continue his previous plan to build a new crypto empire?

Political interest transmission within the group has caused a rift between the House and the Senate.

Looking back to 2024, the two houses of Congress have been “in sync” on crypto legislation. In May of last year, the House of Representatives passed the Financial Innovation and Technology Act of the 21st Century (FIT21) with 279 votes to 136, establishing a new regulatory framework for digital currencies. The support of 71 Democrats demonstrates bipartisan consensus. The bill emphasizes the role of the CFTC in crypto regulation and aims to promote innovation through clear rules, as stated by the members of the House.Young KimIt is called the ‘new era of US crypto regulation.’ Although the Senate is moving slowly, it is also in the hands of senatorsCynthia LummisWith the push from Kirsten Gillibrand, the ‘Lummis-Gillibrand Stablecoin Payments Act’ was proposed, attempting to establish regulations for stablecoins. In March of this year, the House of Representatives voted with bipartisan support to repeal a Biden administration cryptocurrency tax rule, while the Senate did not explicitly oppose it. Both sides aim to provide legal protection for the industry while safeguarding investors.

Due to the successful fundraising operation last year and Trump’s return to politics, the influence of the cryptocurrency industry has surged. If this stablecoin bill is passed, it will be the first major crypto reform in the Senate after years of lobbying.

However, recently, the Senate has not passed a comprehensive bill similar to FIT21, and stablecoin regulation negotiations have been blocked by key Democratic opposition. Senate Minority Leader Chuck Schumer urged Democratic colleagues at a closed-door meeting on May 2 not to commit to supporting the GENIUS Act for now in order to seek more room for amendments. There is a divergence in attitudes between the two chambers on crypto regulation, with the most direct reason being the increasingly close relationship between the crypto industry and political groups, with many political groups suspected of market manipulation for personal gain.

The well-known lawsuit between Ripple and the U.S. Securities and Exchange Commission is a good example. On May 9, court documents showed that Ripple and the SEC have reached a settlement agreement, intending to lift the injunction imposed on Ripple in the August 2024 judgment and to pay only $50 million of the $125 million civil fine to the SEC, returning the remaining $75 million to Ripple. Both parties have agreed not to appeal and not to seek the revocation of the previous judgment.

Ripple’s Chief Legal Officer Stuart Alderoty emphasized ‘case closed’ on social media, calling it the ‘final update,’ attempting to shape the company’s compliance image to dispel market doubts. In addition, Ripple CEO Brad Garlinghouse announced high-profile investment of $2 billion in the crypto industry for business expansion rather than focusing on the case itself. He also mentioned the financial damage caused by the lawsuit, indicating that legal proceedings could result in a value loss of up to $15 billion for XRP holders.

Although the settlement agreement did not specify XRP’s security attributes, Ripple drove XRP price fluctuations by emphasizing ‘policy favors’ and ‘institutional cooperation.’ David Sacks, once appointed as the crypto czar by Trump, publicly claimed that ‘Ripple wins SEC lawsuit’ and promoted the legitimacy of tokens such as XRP, SOL, ADA, etc.

Ripple’s long-standing ‘compliance statement’ has not truly advanced the legality of cryptocurrencies. Its settlement with the SEC seems more like a cover-up for deep-seated interest transfers, especially with XRP holders facing losses of up to $15 billion in lawsuits, deepening suspicions of Ripple manipulating the market. The Democratic Party questions the relationship between its statements and the cryptocurrency assets held by the Trump family. Senior Senator Richard Blumenthal has initiated a preliminary investigation into potential conflicts of interest and illegal activities by companies related to the Trump family. The calls within the Democratic Party to thoroughly investigate cryptocurrency interest groups are growing louder, even affecting the progress of cryptocurrency legislation.

According to TheBlockReports that Senate Majority Leader John Thune has moved to end debate on the stablecoin ‘GENIUS Act’ (full name ‘2025 Stablecoin Innovation Act’) and a crucial procedural vote will take place on Thursday. The bill, led by Bill Hagerty, requires stablecoins to be 100% backed by US dollars or short-term Treasury securities. The bill needs 60 votes to pass, with the Republicans currently holding 53 seats in the Senate, while the Democrats hold 47 seats, requiring the Republicans to secure at least 7 Democratic votes.

On the Democratic side, 9 senators including Ruben Gallego jointly opposed the current version, calling for strengthened regulations on foreign issuers and anti-money laundering provisions. Senator Richard Blumenthal has sent an inquiry letter to the Trump-affiliated crypto company World Liberty Financial to investigate potential conflicts of interest. On the Republican side, Rand Paul criticized excessive regulation of stablecoins, while Senator Josh Hawley expressed concerns about tech giants issuing stablecoins.

Regarding this, Coinbase CEO Brian ArmstrongIt is said that this week, the (US) Congress faces a good opportunity to advance stablecoin and market structure legislation. Coinbase firmly supports the Senate’s debate on the “GENIUS Act”, which requires 60 votes to pass. Coinbase also welcomes the efforts of the House to continue the momentum of FIT21. If comprehensive legislation is to become law before August, both houses of Congress need to take immediate action.

What is the focus of the dispute?

The core goal of the GENIUS Act is to establish a federal regulatory framework for stablecoins to ensure their stability pegged to the US dollar while promoting innovation in the crypto industry. The bill received bipartisan support in the Senate Banking Committee in March of this year.

The core divergence probably stems from Trump, the ‘Crypto President.’ NFTs, meme coins, DeFi, stablecoins, Trump has deeply tied his personal brand to the coin circle. Recently, the ‘Cryptocurrency and AI Innovator’ causing a stir in the circle.Dinner, the cost of a single entry ticket has reached as high as 1.5 million US dollars.

Of course, the most high-profile project in this regard is his stablecoin fund. Trump issued stablecoins through the crypto company ‘World Liberty Financial’ and reached a $2 billion deal with a fund supported by the Abu Dhabi government, triggering dissatisfaction and opposition from the Democratic Party in the Senate. It is reported that Trump’s crypto assets account for nearly 40% of his net worth, about $29 billion, including a large stake in World Liberty Financial and the issuance of $TRUMP and $MELANIA meme coins.

White House spokesperson Anna Kelly argued that Trump’s assets are managed by his children’s trust, with no conflicts of interest, and emphasized Trump’s commitment to making the United States the “global capital of cryptocurrencies.” However, Senator Richard Blumenthal wrote to World Liberty Financial and Fight Fight Fight LLC (the companies issuing $TRUMP meme coins) on May 6, requesting communication records with the Trump family, Trump Organization, and foreign governments to investigate potential conflicts of interest.

The ‘GENIUS Act’, which was expected to undergo procedural voting this week, has been shelved due to the aforementioned ethical controversies and allegations of conflicts of interest. Elizabeth, the chief member of the Banking Committee…WarrenSenator X believes that the ‘GENIUS Act’ may benefit the President financially and urges the Senate to reject the bill. She distributed a brief to all Democratic senators, outlining the shortcomings of the bill in terms of anti-corruption, consumer protection, financial system stability, and national security. The brief suggests that the bill should prohibit elected officials and their families from participating in stablecoin business to avoid conflicts of interest.

Meanwhile, Senator Jeff Merkley introduced the ‘Ending Cryptocurrency Corruption Act’ on May 6, which prohibits the President, Vice President, Members of Congress, and their immediate family from profiting from cryptocurrency assets. The bill was co-signed by 10 Democratic senators, including Kirsten Gillibrand and Angela Alsobrooks, both original signatories of the ‘GENIUS Act,’ demonstrating deep concerns within the Democratic Party regarding Trump’s cryptocurrency business.

Related readings: “WSJ: The Democratic Party is eyeing Trump’s crypto empire》、《Trump returns to the White House after making billions in just 100 days? The Senate is going to investigate…》

In addition, stablecoin giant Tether is also under scrutiny. According to two anonymous Democratic aidesdiscloseSenate Minority Leader Chuck Schumer, a Democrat of New York, urged his colleagues not to commit to supporting the bill for the time being at a closed-door meeting on Thursday, arguing that bargaining power should be used to fight for further changes. In particular, he questioned the bill’s regulatory provisions for foreign companies such as Tether. They point out that the GENIUS Act’s lack of strict regulation of foreign companies, such as Tether, could open the door to money laundering and terrorist financing.

This morning, the U.S. Senate rejected the Stablecoin Innovation and Security Act by a vote of 48-49, with Democrats collectively voting against advancing the bill. The bill required 60 votes to proceed to the final Senate vote, with Republicans currently holding a slim 53-47 majority. Democrats called for specific provisions to be added, prohibiting executive officials including former President Trump and his family members from holding or trading cryptocurrencies, and strengthening anti-corruption clauses. Will the policy direction prioritize consolidating the dominance of the U.S. dollar, or strictly prevent interest transfer? With the partisan struggle overlaying the path of crypto development, the future may face more challenges.

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