In a stunning reversal that has sent shockwaves through the cryptocurrency industry, a group of nine Senate Democrats announced Saturday they would oppose the Republican-led stablecoin legislation they previously supported.
This unexpected change of heart comes just days before the Senate is expected to begin floor consideration of what would be the first-ever U.S. regulatory framework for stablecoin issuers.
“The bill as it currently stands still has numerous issues that must be addressed,” the Democrats wrote in their joint statement, adding they “would be unable to vote for cloture should the current version of the bill come to the floor.”
Most surprisingly, four of the signatories—Sens. Ruben Gallego, Mark Warner, Lisa Blunt Rochester, and Andy Kim—had previously voted to advance the bill when it cleared the Senate Banking Committee in March.
Democrat Stablecoin Defection
The timing of this announcement creates a major hurdle for the legislation, which requires support from at least seven Democrats to reach the 60-vote threshold needed for passage.
The bill, spearheaded by Sen. Bill Hagerty (R-Tenn.), would create regulatory guardrails for stablecoins—digital tokens pegged to assets like the US dollar—and has been viewed as a potential watershed moment for cryptocurrency legitimacy and mainstream adoption.
This Democratic about-face comes despite recent modifications to the bill that were specifically designed to address their concerns. Republicans had been optimistic these changes would secure bipartisan support, but the Democrats’ statement suggests they now hold significant leverage to demand further concessions before any floor vote proceeds.
Political Complications And Crypto Concerns
The Democrats cited several unresolved issues in their statement, calling for “stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system, and accountability for those who don’t meet the act’s requirements.”
While they acknowledged their willingness to “continue working with our colleagues,” the timing indicates serious reservations about the bill’s current form.
The political landscape surrounding cryptocurrency legislation has grown increasingly complicated in recent months, particularly as the Trump family has deepened its involvement in the digital asset industry. A crypto firm founded by the president’s sons is reportedly planning to launch its own stablecoin, raising concerns about potential conflicts of interest that may have influenced the Democrats’ change of position.
“As stablecoins continue to grow in popularity, it is critical for Congress to work in a bipartisan fashion to create a regulatory framework that sets forth clear rules of the road,” the Democrats wrote, acknowledging that “the absence of regulation leaves consumers unprotected and vulnerable to predatory practices.”
Notably absent from the Democratic statement were Sens. Kirsten Gillibrand and Angela Alsobrooks, who remain co-sponsors of the stablecoin bill. Their continued support suggests there may still be a path forward for modified legislation, though the road to passage has clearly become much more challenging.
