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Pro-crypto Democrats withdraw support for the GENIUS Act, putting U.S. stablecoin regulation at risk amid concerns over AML and national security.
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Regulatory uncertainty delays stablecoin legislation, impacting market sentiment as Bitcoin trades under pressure around $94.5K.
A major U.S. stablecoin bill that was once considered a key step toward crypto regulation is now on shaky ground. In a surprising twist, several pro-crypto Senate Democrats who previously backed the legislation have withdrawn their support—putting the bill’s future in serious jeopardy.
According to a previous coverage by Crypto News Flash (CNF), on the Framework Ventures critics of U.S. stablecoin regulations, it was explained that the GENIUS Act may restrict foreign stablecoin issuers, weakening dollar dominance and driving financial innovation outside the U.S.
The legislation, formally called the GENIUS Act and introduced by Senator Bill Hagerty, aimed to create the first comprehensive U.S. regulatory framework for stablecoins. However, as referenced from a recent tweet, it explained why the Senate’s crypto bill is in turmoil:
The path forward for landmark stablecoin legislation is in jeopardy after 9 key Dems said they wouldn’t support revisions that GOP lawmakers unveiled last week.
Nonetheless, nine Democrats, including prominent names like Mark Warner, Andy Kim, and Ruben Gallego, said in a May 3 statement that the bill “still has numerous issues” and warned they would not back a procedural vote unless significant changes are made.
The Sudden Change
According to most media, the senators cited concerns around anti-money laundering safeguards, national security risks, and accountability for foreign or noncompliant stablecoin issuers.
While some revisions were made to the bill after it passed the Senate Banking Committee in March, the lawmakers say those changes fell short.
In addition, their about-face is particularly significant because many of them had supported the bill during earlier negotiations. This reversal highlights growing unease even among crypto-friendly Democrats, who now appear more cautious about moving forward without stricter protections.
Bitcoin and Market Context
According to recent market reports, while the lawmakers have signaled they’re still willing to work together, any delay could push stablecoin regulation further down the legislative calendar—potentially into 2026.
Reiterating a previous CNF report highlighting that a $1.25B stablecoin injection was known to have fueled the next BTC pump. However, the uncertainty is echoing in the broader crypto market.
At the time of writing, Bitcoin (BTC) is trading at $94,594.49, down by 1.14% in the past 24 hours and 0.21% in the past week. See BTC price chart below.
