Why stablecoin bill’s stumble shows crypto must woo Democrats

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The crypto industry and their Republican allies on Capitol Hill just learned a painful lesson — they’re not going to get anything passed without Democratic support.

And that changes the political calculus as more legislation moves forward in the weeks to come, including a stablecoin measure and a market structure bill in the House of Representatives.

For all the momentum of the first 100 days of President Donald Trump’s second term, it bears remembering that the Republicans hold Congress by a slim margin — seven votes in the House and three in the Senate.

Next stage

On Thursday, Senator John Thune, the majority leader, failed to muster the 60 votes needed to advance the landmark stablecoin bill to the next stage in potential approval, Aleks Gilbert and I reported.

To be sure, Thune was attempting to fast-track the legislation, which is why he needed the super-majority.

Still, two weeks ago the so-called Genius Act looked like a slam dunk. In the end, the South Dakota senator couldn’t find the 10 Democrats he needed to get it over the line.

“I just don’t get it, I don’t know what more they want,” said Thune on the floor of the Senate.

Answering that question is now vital as Senate Republicans and their friends in the crypto industry regroup to move their agenda forward.

They may want to turn to a statement issued by Senator Elizabeth Warren in March, shortly after the bill was introduced.

Warren, the ranking minority member on the Senate Banking Committee, elucidated a raft of shortcomings in the bill on protecting consumers, the financial system, and national security from unfettered dollar-pegged cryptocurrencies.

But the really interesting bit was Warren’s support for a “sensible stablecoin bill.” Indeed, Democrats were game for the legislation — five Democrats joined Republicans to vote the bill out of the Senate Banking Committee.

This included Senator Ruben Gallego, an Arizona Democratic freshman who supports crypto but found the bill too flawed in its current form to fast-track.

It doesn’t help that Trump, with his family’s many crypto ventures, is drawing fire from Democrats for pursuing historic regulatory changes to an industry he stands to profit from.

Wooing Democrats

While expressing support for bipartisanship is a bromide, the crypto industry clearly understands the importance of courting Democrats.

On Thursday, Kristin Smith, the outgoing CEO of the Blockchain Association, emphasised the need for “bipartisan discussion.”

Moreover, Anthony Scaramucci, the longtime Bitcoin investor and hedge fund manager, said way back in January that Democrats were primed to support well crafted legislation.

After the industry spent more than $130 million on pro-crypto candidates in the 2024 election, Democrats were wary of taking a hard line against its agenda, he said.

Scaramucci also said a bipartisan approach would lessen crypto’s identification with the GOP and bestow digital assets with more mainstream appeal.

After the stablecoin bill’s setback, bipartisanship isn’t just desirable — it’s going to be necessary.

Edward Robinson is the story editor for DL News. Contact the author at ed@dlnews.com.