Senate Crypto Clash: Democrats Pull Support for Stablecoin Bill!

In a dramatic shift that has stunned the crypto world, nine Senate Democrats have withdrawn their support for the bipartisan stablecoin regulation bill, just days before its expected floor debate. This move threatens the passage of what could be the first U.S. legal framework for stablecoin issuers.

The bill, led by Sen. Bill Hagerty (R-Tenn.), aimed to establish oversight for dollar-pegged digital tokens and was seen as a pivotal step toward cryptocurrency legitimacy. However, Democrats now say the bill, in its current form, lacks critical safeguards.

Notably, four of the senators—Ruben Gallego, Mark Warner, Lisa Blunt Rochester, and Andy Kim—had previously supported the bill during committee stages, adding to the shock of their reversal.

“The bill still has major flaws around anti-money laundering, foreign issuers, and financial system stability,” the group said in a joint statement. They also expressed concern over potential conflicts of interest, pointing to reports that a crypto firm tied to Donald Trump’s sons is preparing to launch its own stablecoin.

The sudden withdrawal leaves Republicans short of the 60 votes needed for passage, though supporters like Sens. Kirsten Gillibrand and Angela Alsobrooks remain onboard. The future of the bill now hinges on further negotiations and possible revisions.

The message from Senate Democrats is clear: regulation is needed, but not at the expense of financial integrity and national security. The path to crypto legislation just got a lot more complicated.