Crypto Executives Storm Capitol Hill to Rescue Stalled Stablecoin Bill

The GENIUS Act, first introduced earlier this year, aims to establish a federal framework for issuing and managing stablecoins, digital assets pegged to fiat currencies like the U.S. dollar. The bill would place regulatory oversight under the Federal Reserve, outline reserve requirements, and provide pathways for both state-chartered and federally regulated stablecoin issuers.

Supporters say the legislation is long overdue. Coinbase CEO Brian Armstrong has publicly urged Congress to pass comprehensive crypto regulation, warning that delays could drive the $240 billion stablecoin market overseas. He emphasized that clear rules are essential to preserve U.S. leadership in financial innovation.

The bill’s latest draft is the result of months of bipartisan negotiations, co-led by Republican Representative French Hill and Democratic Representative Jim Himes. However, it failed to pass a Senate committee vote on May 8 after Democrats raised objections over unresolved ethical concerns and the potential financial entanglements of President Trump.

The legislation’s momentum has been disrupted by allegations that members of the Trump family and affiliated companies could benefit financially from regulatory changes. Specifically, Democrats have pointed to the recent launch of the TRUMP memecoin and Trump-affiliated financial vehicles like World Liberty Financial, which has ties to both real estate and crypto projects.

Democratic lawmakers have raised concerns that the GENIUS Act could financially benefit President Trump or his family due to their involvement in crypto ventures.

In response, Senator Jeff Merkley (D-OR) announced plans to introduce the End Crypto Corruption Act, which would bar current and former presidents, vice presidents, members of Congress, and their immediate family from launching or endorsing cryptocurrencies for financial gain. The bill would also require disclosure of digital asset holdings above a certain threshold.

While Republicans have dismissed the criticism as politically motivated, some moderates have acknowledged that the optics could complicate bipartisan cooperation.

Despite these concerns, some lawmakers are working behind the scenes to find middle ground. Representative French Hill, a leading voice on digital asset policy, has emphasized the importance of continued bipartisan engagement to advance stablecoin regulation.

Hill has previously stated that while political tensions have complicated the process, there remains strong interest across party lines to establish a clear and responsible framework for digital assets.

The GENIUS Act would also include provisions for anti-money laundering (AML) compliance, consumer protection standards, and clearly defined reserve backing mechanisms. These stipulations are meant to reassure regulators and financial watchdogs wary of another Terra-style collapse.

The crypto delegation in Washington this week included executives from Kraken, Paxos, Gemini, and the Blockchain Association, as well as venture capital leaders from firms such as Andreessen Horowitz. Their goal: to convince lawmakers that passing the GENIUS Act will foster innovation while protecting consumers.

Jeremy Allaire, CEO of Circle, has warned that without swift regulatory action, the U.S. risks losing its competitive edge in the stablecoin market. He has pointed to Europe’s implementation of MiCA and growing crypto activity in regions like Hong Kong and the UAE as signs that global capital is shifting toward jurisdictions offering clearer regulatory frameworks.

Industry leaders also met with Treasury and Federal Reserve officials, emphasizing the need for regulatory certainty. According to sources familiar with the meetings, discussions focused on how the GENIUS Act could work in parallel with ongoing guidance from the Financial Stability Oversight Council (FSOC) and the Securities and Exchange Commission (SEC).

A new vote on the GENIUS Act is expected as early as next week. The bill will need broader Democratic support to pass the Senate, but its fate remains uncertain. If the political impasse continues, the issue may be delayed indefinitely, potentially pushing any major federal crypto legislation closer to the 2026 midterm elections.

If passed, the GENIUS Act would become the first comprehensive federal legislation governing stablecoins in the U.S., potentially setting the tone for how digital assets are regulated across the broader financial ecosystem.