The Senate is set to hold a crucial procedural vote on Tuesday for the GENIUS Act, a bill designed to establish a comprehensive regulatory framework for cryptocurrencies and other digital assets.
The legislation needs Democratic support to overcome a filibuster, with ethical constraints related to President Trump's crypto holdings emerging as a major point of contention. Additionally, the banking sector is urging changes to stablecoin-related provisions, warning of potential deposit outflows from traditional financial institutions.
This long-awaited crypto market oversight bill faces an uncertain outcome in Tuesday's Senate vote as banks and the crypto industry engage in a final round of lobbying. The GENIUS Act, which aims to create regulatory rules for cryptocurrencies and digital assets, has languished in the Senate for months. While it cleared the Senate Banking Committee in May, Senate leadership has struggled to secure the 60 votes needed for passage. With full attendance, at least seven Democratic senators would need to vote in favor to break a filibuster.
Several issues have slowed the legislative process and could even derail Tuesday's vote. The banking industry warns it cannot support the bill unless it includes provisions prohibiting interest-like payments on stablecoins, arguing such a mechanism would trigger deposit outflows. Only two Democrats supported advancing the bill at the committee stage; Democrats say they will not vote in favor unless the bill includes stricter ethics provisions to prevent President Trump and his family from profiting from crypto ventures.
Tuesday's preliminary vote represents a decisive moment for the crypto bill. Senate Majority Leader John Thune of South Dakota scheduled the vote before the August recess. Supporters hope to secure enough votes to keep the bill alive.
Senator Cynthia Lummis of Wyoming, a key sponsor, expressed optimism after releasing an updated version of the bill on Thursday to garner more support: "Over the past year, both parties have worked together on this legislation, giving everyone the opportunity to shape the GENIUS Act. The bill genuinely reflects bipartisan priorities. This is good legislation, and it's time to make it law."
Many Democrats oppose the bill primarily due to the absence of ethics provisions, which they believe must restrict the Trump family from profiting from crypto business ventures. Maryland Democratic Senator Chris Van Hollen said in a video on X on Sunday: "Based on feedback from my constituents, their top concern is not passing the GENIUS Act. This bill claims to establish regulation for cryptocurrency and protect consumers, but it still has significant unfixed loopholes." He added: "We cannot let this bill pass as is."
As things stand, the outcome of the GENIUS Act vote is too close to call. Republican bill sponsors released a revised draft on Sunday evening, calling it their final response to Democratic demands. The revision incorporates most of the crypto ethics agreement brokered by North Carolina Republican Senator Thom Tillis and Arizona Democratic Senator Ruben Gallego, which Trump has now endorsed. It includes a key Democratic priority: allowing state attorneys general to enforce ethics requirements against federal officials. The bill also offers a compromise on stablecoin yields to appease banking interests, authorizing the Treasury Secretary to impose limits on stablecoin-related reward incentives if community banks experience significant deposit outflows.
A Democratic aide involved in the negotiations said anonymously that enough Democrats may vote in the preliminary vote to keep the bill alive for further consideration. Thune has characterized the vote as a "free vote," meaning it only serves to advance the legislation; amendments and additional votes will follow to address outstanding disputes.
Ohio Republican Senator Bernie Moreno, another key sponsor who received crypto industry funding during his 2024 campaign against former Democratic Senator Sherrod Brown, reminded colleagues on Sunday that Tuesday is not the final vote. Moreno posted on X: "This is not the final passage vote; it's just to end debate and determine whether the Senate should consider this digital asset regulation bill. If senators have concerns, we can still submit amendments after agreeing to proceed with consideration."
The Democratic aide also indicated the White House has signaled willingness to make further concessions on ethics provisions and other issues if the Senate clears Tuesday's procedural vote. That commitment could serve as leverage to win votes from crypto-friendly Democrats waiting to see the White House's next move. A White House press office email statement read: "The President has been clear: Congress must pass the GENIUS Act so we can lead global innovation ahead of foreign competitors. The Trump administration has worked with Congress to advance this bill and has already agreed to include the broadest ethics provisions ever written." The statement did not respond to questions about specific ethics concessions.
The crypto industry remains optimistic about the bill's prospects. Coinbase CEO Brian Armstrong has publicly supported the legislation, stating Thursday that the bill is ready for a Senate vote. Armstrong also noted that crypto industry regulation will arrive regardless of the outcome: "Honestly, even if the bill doesn't pass, it's not necessarily a bad thing. The SEC and CFTC have already indicated they're preparing to issue regulatory rules. Either way, we'll see regulatory clarity by the 15th of this month or shortly after."
Last week, Coinbase also partnered with financial services firm Moov to enable stablecoin-related capabilities for community banks, an effort aimed at alleviating community bank concerns about being squeezed by the GENIUS Act. Banking groups, including the Independent Community Bankers of America, have publicly opposed both the old and latest versions of the bill, with stablecoin yield mechanisms being their core concern.
Even if Tuesday's procedural vote fails, the bill could theoretically be revised and brought back for consideration. However, it remains uncertain whether enough time remains in this Congress to complete revisions and the full legislative process. Opposition to the bill shows no signs of fading. The American Bankers Association has led nearly 80 banking organizations in a letter to Thune and Senate Minority Leader Schumer, urging the Senate to strengthen the bill's stablecoin provisions. Some Republican senators have also voiced concerns about the GENIUS Act after hearing from banking constituents. The banking groups stated in their letter: "The bill's prohibition on stablecoin interest, yield, and reward payments must be strengthened to protect community financial institution deposits and safeguard local lending to small businesses, farmers, and families."
The latest revised bill text appears not to fully address all banking industry demands. Brooke Ybarra, senior vice president of innovation and strategy at the American Bankers Association, said: "Bankers across the country have spoken with their senators about the importance of protecting deposits and local credit." Ybarra also expressed hope that senators would reject the bill at the floor stage: "More and more lawmakers share our concerns about the existing interest loophole. Targeted amendments to the GENIUS Act can improve the text and increase its chances of passing the full Senate. We still look forward to the Senate ultimately considering a revised GENIUS Act that balances innovation without harming the economy."