Senate Stablecoin Bill Hits Roadblock Amid Bipartisan Clash

The US Senate is facing a sudden breakdown in negotiations over a landmark cryptocurrency bill, placing one of former President Donald Trump’s top financial policy priorities in jeopardy.

The legislation, aimed at establishing the country’s first federal regulatory framework for stablecoins—digital assets pegged to the U.S. dollar—has hit a bipartisan snag, following pushback from key Senate Democrats.

On Saturday, nine Democratic senators, including some who had previously backed the bill in committee, issued a joint statement rejecting a revised version of the legislation introduced by Republicans last week.

Senate Democrats Say Revised Crypto Bill Lacks Key Protections

The new draft, they argue, falls short on critical safeguards against money laundering and fails to adequately protect the financial system.

Senator Ruben Gallego, who led the Democratic response, said efforts to negotiate improvements had been ongoing for weeks, but the latest version “backpedaled on a lot of the progress we made.”

In a post on X, he criticized Republicans for seeking a floor vote without incorporating Democratic input.

The clash has emerged despite growing bipartisan interest in advancing crypto regulation.

The stablecoin bill, spearheaded by Sen. Bill Hagerty (R-Tenn.), was passed out of the Senate Banking Committee in March with backing from five Democrats.

However, momentum appears to have stalled amid deepening political divisions.

Democratic concerns reportedly intensified during a private caucus meeting last week, where Senate Majority Leader Chuck Schumer urged colleagues not to commit to the bill in its current form.

According to aides, Schumer raised issues with how the legislation might treat foreign firms like Tether, the issuer of the largest stablecoin globally.

Senator – I am going to destroy the people who supported you from crypto. And I will be successful in ensuring 100% of funding goes to defend the GOP *house* in 26 so that you suffer four years of losses. You were never a good faith actor, my friends were too weak to admit it.

— Ryan Selkis (d/acc) 🇺🇸 (@twobitidiot) May 4, 2025

Senator Elizabeth Warren also voiced strong opposition, citing reports that a $2 billion deal backed by Abu Dhabi would use stablecoins issued by a Trump-affiliated firm.

The Massachusetts senator warned against pushing through industry-friendly legislation while the Trump family expands its crypto ventures.

Despite these objections, Sen. Kirsten Gillibrand, a co-sponsor of the bill, defended the revised draft, asserting that regulation—not delay—is the best way to address concerns over Trump’s crypto involvement.

Four of the five Democrats who initially supported the bill have now said they cannot back the current version.

Without their support, Republicans would struggle to secure the 60 votes needed to proceed. Nevertheless, lawmakers on both sides say talks will continue in hopes of reaching a bipartisan resolution.

Stablecoin Market to Surge 10x to $2 Trillion by 2030

Citigroup has projected a dramatic rise in the stablecoin market, forecasting that its total market capitalization could soar from nearly $240 billion today to over $2 trillion by 2030.

The prediction says the growth in adoption would be driven by regulatory developments and increased interest from both financial institutions and the public sector.

According to the banking giant, stablecoin supply could reach $1.6 trillion by the end of the decade under its base-case scenario, while a more optimistic outlook places the figure at $3.7 trillion.

As reported, the number of active stablecoin wallets has surged by over 50% in the past year, reflecting growing adoption and engagement within the digital asset ecosystem.