Senate Blocks GENIUS Act, Sparking Crypto Firestorm

A pivotal moment for U.S. crypto regulation was derailed this week as the Senate failed to advance the GENIUS Act, a bipartisan bill aimed at establishing a federal framework for stablecoins. The setback not only stalled legislative progress but also ignited political infighting and a wave of criticism from industry leaders and government officials alike.

The GENIUS Act—short for Guiding and Establishing National Innovation for US Stablecoins—had been positioned as a rare bipartisan effort to provide clarity for stablecoin development in the United States. But on May 8, it collapsed in the Senate, with Republicans accusing Democrats of abandoning the bill for political reasons.

Senate Banking Committee Chairman Tim Scott was quick to blame Democrats for the impasse, calling the move a deliberate attempt to block a potential policy victory for former President Donald Trump. “It was a vote against President Trump and President Trump’s legislative agenda,” said Scott, framing the vote as politically motivated obstruction.

His sentiments were echoed by Treasury Secretary Scott Bessent, who took to X to warn that the Senate’s failure to pass the act damages U.S. credibility in a fast-moving global digital asset landscape. “The world needs American leadership,” Bessent said, suggesting the U.S. missed a critical opportunity to shape the future of stablecoins.

Meanwhile, congressional Democrats have been advancing a parallel push to crack down on crypto-related corruption. Measures like the MEME Act and the End Crypto Corruption Act seek to prevent federal officials and their families from profiting off digital assets—including stablecoins. Senator Elizabeth Warren characterized the GENIUS Act as a “corrupt stablecoin deal,” underscoring how deeply divided the political camps have become on crypto policy.

Outside Capitol Hill, the crypto industry responded with frustration. Galaxy Digital CEO Mike Novogratz urged lawmakers to return to negotiations, warning that continued delays are costing the U.S. its competitive edge. As other global regions, including the EU and parts of Asia, implement comprehensive digital asset regulations, the U.S. risks falling behind.

Without the GENIUS Act, stablecoin developers and investors remain in limbo, grappling with regulatory uncertainty. The bill’s failure has cast doubt on whether the U.S. can provide the policy clarity needed to keep pace with the rapidly evolving digital economy—or whether partisan battles will continue to stall progress.