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U.S. Senate Blocks Stablecoin Bill, Delivering Setback to Crypto Industry

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A bill aimed at establishing a U.S. regulatory framework for stablecoins failed to advance in the Senate on Thursday, marking a significant setback for the crypto industry and stalling hopes for near-term federal legislation governing dollar-pegged digital tokens.

Known as the GENIUS Act, the legislation fell short of the 60 votes needed to proceed to a full Senate vote, securing only 49 votes in favor. The failure comes despite months of lobbying by the crypto sector, which poured over $119 million into supporting pro-crypto candidates during last year’s election cycle and framed stablecoin regulation as a bipartisan issue.

Stablecoins — cryptocurrencies designed to maintain a stable 1:1 peg to the U.S. dollar — are widely used in crypto trading and payments, and their mainstream use has grown rapidly. While the industry had hoped the bill would pass this year, Democratic pushback intensified, particularly in light of former President Trump’s growing involvement in crypto ventures.

Two Republican senators — Josh Hawley and Rand Paul — voted against the bill alongside most Democrats, citing unresolved concerns. Senator Mark Warner, a Democrat who had previously backed the bill in committee, explained his opposition during the vote:

“The work is not yet complete, and I simply cannot in good conscience ask my colleagues to vote for this legislation when the text isn’t finished.”

A group of Democrats who initially supported the measure accused Republicans of refusing to strengthen the bill’s anti-money laundering safeguards and foreign stablecoin oversight, particularly following news that Trump-affiliated World Liberty Financial would launch a stablecoin to support a $2 billion Abu Dhabi-backed investment in Binance.

Senate Majority Leader John Thune expressed frustration on the floor after the vote, blaming Democrats for halting momentum:

“Not every bill that comes to the floor is a final bill… This was a missed opportunity for a bipartisan win.”

With this latest setback, the path forward for stablecoin regulation remains uncertain, and the crypto industry is left grappling with yet another delay in achieving formal legal clarity in the U.S. financial system.

Senators Request Biden to Grant ByteDance 90-Day Extension on TikTok Sale Deadline

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Democratic Senator Ed Markey and Republican Senator Rand Paul have called on President Joe Biden to extend by 90 days a looming January 19 deadline that requires China-based ByteDance to sell the U.S. assets of its popular short-video app TikTok or face a nationwide ban.

Their request comes as the Supreme Court prepares to hear ByteDance and TikTok’s legal challenge against the law mandating the sale. Arguments in the case are scheduled for January 10. In a joint letter to Biden, the senators argued that the law’s uncertain future and its implications for free expression warrant the 90-day reprieve.

Background on the Controversy

The contentious legislation was passed by Congress in April and signed into law by Biden. It stems from national security concerns raised by the Justice Department, which has argued that TikTok’s access to vast amounts of user data—including locations and private messages—makes it a significant threat. The department also raised concerns about ByteDance’s potential to manipulate content visible to American users.

TikTok, however, has denied these allegations, maintaining that it does not pose an imminent threat to U.S. security. The company and its parent, ByteDance, argue that the law violates the First Amendment’s protections of free speech.

Political Reactions

The debate over TikTok has divided lawmakers. Senate Republican Leader Mitch McConnell, in a brief filed with the Supreme Court, urged the court to reject any delay in enforcing the law, likening TikTok to a “hardened criminal.” Similarly, other senators, such as Republican Josh Hawley and Democrat Richard Blumenthal, insist that ByteDance must comply with the legislation.

On the other hand, Markey and Paul’s appeal highlights concerns about free expression and the impact of a potential TikTok ban on its 170 million American users.

Trump’s Reversal on TikTok

In a surprising turn, Republican President-elect Donald Trump, who previously sought to ban TikTok during his first term in 2020, has shifted his stance. During this year’s presidential race, Trump expressed a newfound fondness for TikTok, stating that he has “a warm spot” for the app and would “take a look” at the matter if elected. Trump will assume office on January 20, just one day after the current TikTok sale deadline.

Next Steps

With the Supreme Court set to deliberate on the matter and the Biden administration under pressure to extend the deadline, the future of TikTok in the U.S. hangs in the balance. Neither the White House nor TikTok has commented on the senators’ request.