https://www.citationneeded.news/issue-86/
"Eighteen Democratic Senators joined nearly all Senate Republicans to vote for
the
GENIUS Act stablecoin bill, which aims to establish a federal regulatory
framework for stablecoins and will serve to lend the asset class governmental
imprimatur. The 68–30 vote followed shortly after
Lever News published leaked
messages from a secret group chat of Democratic strategists and cryptocurrency
industry advocates, where the political operatives opined that Democratic
Congresspeople could “not afford to alienate a very vocal and wealthy group of
donors” by opposing the bill. One such donor, Avichal Garg from Electric
Capital, was very explicit: “If Dems bail on this [bill], they will get 0
dollars going forward.” (Garg and his firm contributed around $680,000 to
various PACs last election cycle). In addition to the crypto industry’s 2024
election contributions, various cryptocurrency firms and lobbying groups, as
well as traditional financial institutions, have spent millions on Senate
lobbying related to the
GENIUS Act. Crypto.com, Kraken, Digital Currency
Group, Paradigm, Tether, Circle, and Coinbase have altogether spent over $2
million in lobbying related to the bill.
While Senate Majority Leader John Thune (R-SD) had previously promised
Democrats that if they supported the cloture vote, they could later amend the
bill during an open amendment process on the floor, he quickly reneged on that
promise, leaving Democrats unable to force votes on amendments seeking to limit
President Trump’s ability to personally profit from stablecoins, prevent Big
Tech companies from issuing their own stablecoins, or eliminate the possibility
of federal bailouts for stablecoins. The bill ultimately passed the Senate
without any amendments. Some Republican Senators who had previously opposed the
idea of Facebook issuing its own token back in 2019, such as Senator Kennedy
(R-LA) who said “Facebook now wants to control the money supply... What could
possibly go wrong?”, were evidently perfectly happy to support this bill.
Some Democrats in Congress have also expressed concerns about the fact that
President Trump is already profiting from his own stablecoin venture, the USD1
token issued by his World Liberty Financial company. Representative Liccardo
(D-CA), speaking about a companion stablecoin bill in the House, explained: “We
want to avoid the inevitable conflicts of interest that arise when the
President’s appointees, such as the Secretary of the Treasury, are regulating
the very product that provides unique and exclusive financial benefit to the
President and his family.” Other legislators had more structural concerns about
the bill, particularly to do with insufficient consumer protections, poor
anti-money laundering and national security controls, and the possibility of
federal bailouts for stablecoin issuers. “The
GENIUS Act lacks the basic
safeguards necessary to ensure that stablecoins don’t blow up our entire
financial system,” argued Senator Warren, who also pressed her fellow Democrats
to “show a little spine”."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
