The stablecoin bill passed a key procedural vote, finally, but it was a heavy lift engineered in the 11th hour Monday night by the bill’s sponsor, Tennessee GOP Sen. Bill Hagerty.
He had to remind crypto-friendly Democrats what was at stake – and to ignore the politicization of the legislation by the crypto-hating Massachusetts Sen. Elizabeth Warren, On The Money has learned.
First the good news: The bill, known as the GENIUS Act, is the first major piece of crypto legislation ever, and hopefully not the last. It helps clear a major hurdle for the $3.5 trillion crypto industry by setting clear rules for the creation of stablecoins, popular digital assets, backed up by real assets like US Treasuries, as opposed to the hot air of most crypto. The Senate will be debating amendments etc., in the coming days, before an all-but certain passage before it heads to the GOP controlled House and then, if all goes according to plan, President Trump’s desk to sign into law.
If all that happens (again, it’s likely given what just went down, but with this crew who knows?), there will be better disclosures of the hard assets, better ways to transact the stablecoins, and rules for keeping them in reserve, which according to sources, will be more efficient because it prevents the big banks from profiting off of one of the traditional banking system’s anachronisms. They won’t be able to profit from the “float” because transactions can take place seamlessly, one of the benefits of digital coins and its underlying blockchain technology.
More good news: On The Money has learned that Hagerty has emerged as crypto’s most effective, and much-needed spokesman on Capitol Hill. Sources in the digital coin business tell me that first, he fought skepticism in his own party (Sens. Rand Paul and Josh Hawley were no votes), and managed to twist enough arms to get the bill to a vote before the Senate turned to passage of President Trump’s “big, beautiful budget” early Thursday morning.
He also fought Elizabeth Warren. When the procedural vote on the Genius Act came down late Monday, Warren began telling her Dem colleagues that passage of the bill is part of a Trumpian crypto grift since the president and his wife have meme coins, he went to battle again. The numbers soon went sideways; Hagerty worried he didn’t have the minimum 60 mandatory votes to pass the measure given Senate filibuster rules.
“It will be either 59 votes or 70″ voting in favor, a nervous Hagerty predicted, sources said
In the end, he got 66 votes, with nearly all the senate Republicans (except Paul, and GOP Senator Jerry Moran) plus a handful of Dems. His winning argument: Stablecoins aren’t meme coins. The legislation has little to do with Trump’s crypto side hustle. It’s just good law.
Now some bad news. Trump’s crypto business isn’t the scandal of the century that Warren & Co. tried to make it. Unlike Hunter Biden’s swampy overseas dealings, talk of payments to the “big guy,” it’s totally disclosed for the public to debate.
And yet, you can make the case that it looks bad. It’s still an optics problem for the GOP that can be exploited when the senate tries to pass other more important crypto bills. Amendments about Trump’s business dealings could bogged down full passage of the legislation. It’s the likely reason for some of the GOP holdouts.
The problem is obvious: The president appoints the people heading crypto regulation, the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission. Trump is literally de-regulating an industry he’s profiting from. This appearance problem could be a sticking point when Congress takes its next legislative step, a rewrite of securities laws to better serve digital coins.
More bad news: Where was Trump’s crypto council, the industry experts who were appointed by him to mainstream the industry and get legislation that does just that?
Led by venture capitalist David Sacks and a former congressional candidate Bo Hines, the council, in the words of crypto experts I spoke to, had “no juice” on Capitol Hill, as I reported last week, when Hagerty needed to twist arms just to bring the bill to a vote. When the vote came, Hagerty was alone again.
The White House is pushing back on this interpretation of council’s work; it assembled some formidable counter arguments from industry sources including Cody Carbone, the CEO of the Digital Chamber of Commerce, a leading crypto advocacy group who said in a statement: “The White House Crypto Council has played a pivotal role in advancing digital asset policy in the United States since Inauguration Day. Thanks to Bo and David’s leadership and coordination, we’re on the brink of real, meaningful legislative action for the first time.”
Maybe, but based on what I saw last week, Hagerty better prepare for more arm twisting.
