The United States government is on the verge of implementing its first comprehensive crypto legislation: the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. However, ongoing debates among lawmakers have surfaced, particularly concerning the involvement of public officials and their potential benefits from the burgeoning stablecoin market. Specifically, Democratic lawmakers are advocating for enhancements to the bill that would shield against corruption, especially regarding President Donald Trump’s family and associates.
As reported by Axios, a group of senators is calling for amendments to ensure that Trump and his inner circle do not exploit stablecoins for financial gain, or engage in influence peddling. This push comes amid concerns that the legislation could inadvertently facilitate corrupt practices.
Senators Push to Amend GENIUS Act
Initially introduced by Senator Bill Hagerty in February, the GENIUS Act aims to lay down a regulatory framework for stablecoins within the United States. Co-sponsored by Senators Kirsten Gillibrand and Cynthia Lummis, the bill seeks to establish a federal licensing and oversight structure for stablecoin issuers, mandating regular security audits and restricting stablecoin issuance to licensed entities only. Additionally, the legislation aims to prohibit the trading of assets that lack full backing.
Despite the bill’s advancement in the Senate earlier this week, underlying concerns about potential conflicts of interest tied to Trump’s cryptocurrency investments emerged. Although the Democrats had briefly retracted their support, most ultimately voted in favor, with the notable exception of Senate Minority Leader Chuck Schumer.
Concerns Over Trump’s Crypto Ventures
With the GENIUS Act nearing legislative completion, Democratic senators are re-emphasizing the need for protective amendments against corruption. Key figures such as Senators Jeff Merkley, Elizabeth Warren, and Schumer are working to introduce their amendment prior to the bill’s finalization in the Senate. Co-sponsors of the amendment, including Senators Gary Peters, Jack Reed, Chris Murphy, and Michael Bennet, have indicated that they may withdraw support for the overall bill if adequate corruption safeguards are not included.
As discussions remain ongoing, Senator Mark Warner argues that the legislation should proceed despite concerns related to the Trump family’s influence. He asserts that fears of corruption should not overshadow the pressing need to embrace the reality of enduring blockchain technology.
The backdrop for these debates is further complicated by the Trump family’s launch of their crypto business, World Liberty Financial (WLFI), which has recently introduced a new stablecoin dubbed USD1. This asset has already been positioned to play a central role in a substantial $2 billion investment related to Binance, further entwining Trump’s financial interests with the stablecoin landscape.
Moreover, leading Democrats have initiated an investigation into Trump’s crypto endeavors, spotlighting apprehensions of illegal fundraising practices, potential abuses of political power, and influences from foreign stakeholders.
The future of the GENIUS Act hangs in the balance as legislators seek to navigate the complexities of cryptocurrency regulation while addressing the significant ethical concerns posed by the involvement of prominent political figures.
