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When we last left the bill known as the GENIUS Act, the fix appeared to be in. The crypto industry had spent millions in the 2024 elections to get a friendly regulatory regime, and GENIUS, which would sanction stablecoins and enable Big Tech firms to issue their own private currencies, was the opening salvo in a broad restructuring of the financial system to suit their ends. There was a minor hiccup in the form of Donald Trump’s orgy of crypto corruption, including a new Trump-issued stablecoin, which made it difficult for Democrats to effectively bless crypto’s codification. But they found a work-around, by pretending to fight Trump’s corruption with an amendment blocking presidents from issuing crypto assets that was designed to fail, after which they would happily sign on to the bill.
That’s where we were headed. A motion to advance the GENIUS Act passed, with 16 Democrats joining nearly all Republicans. And final passage, after the amendments were disposed with, was scheduled to happen last week.
It did not. And the reasons for that are fascinating, due more to banking industry upset, and an idiosyncratic crusade by a right-wing Republican that the rest of his caucus doesn’t want to touch, rather than to some change of heart among Democrats. However, the pain imposed on the Democrats’ crypto collaboration has made it harder for the full deregulatory agenda to pass, and just maybe saved the nation from needless financial pain.
First, some banking interests are working to stop the GENIUS Act. While the Independent Community Bankers of America has been largely mute, state-based organizations in Illinois and Texas have stepped up, citing numerous risks. They oppose Congress establishing a “shadow” sector of stablecoin-issuing non-banks, with access to Federal Reserve payment and lending services and the possible ability to pay interest on stablecoin deposits, without the same regulatory scrutiny that banks endure. The Prospect has learned that both these community banking associations have been working on Capitol Hill to stop the bill, perceiving threats to their entire business model.
But the bigger factor involves a core promise Senate Majority Leader John Thune (R-SD) made to get the top slot in leadership. He vowed a return to “regular order,” the process by which senators could offer amendments on the floor, with everyone having a chance to shape legislation. This concept stalled out under Harry Reid and Mitch McConnell, largely because the opposition party would force embarrassing amendment votes that the majority didn’t want to take.
There haven’t been too many actual bills reaching the Senate floor since Thune’s promise. But the GENIUS Act was an early test. Thune did not “fill the amendment tree,” meaning that any senator could come to the floor and propose an amendment. Last week, Sen. Michael Bennet (D-CO) actually did it, offering a clarifying amendment that restrictions on “senior executive branch officials” in the bill would include the president and vice president.
A bill co-sponsored by Sen. Dick Durbin (D-IL) forces banks to offer alternatives to Visa and Mastercard for processing credit card transactions.
But that’s not what’s giving Republicans and pro-crypto Democrats heartburn. Instead, it’s Sen. Roger Marshall (R-KS), who has filed his Credit Card Competition Act (CCCA) as an amendment to the bill. This has stalled the entire process.
The CCCA, co-sponsored by Sen. Dick Durbin (D-IL), pits retailers against the Visa/Mastercard duopoly. The bill forces banks to offer alternatives to Visa and Mastercard for processing credit card transactions. The goal is to inject competition to prevent Visa and Mastercard from continuing to raise so-called “swipe fees,” something that has strangled retail businesses in recent years. Supporters say that it makes sense to attach legislation about payments to a crypto bill that also has a lot to do with payments.
A previous battle on debit card swipe fees took years to resolve, as it forced Congress to mediate between two powerful business sectors. Both sides, the retailers and the credit card companies, claim they have the votes to win on this amendment. Banks and credit unions are working against the amendment with their partners at the credit card firms, even getting Vice President JD Vance to support a “clean” GENIUS Act. Visa and Mastercard also have the support of the airlines, which over the years have become flying banks with branded credit cards. The Merchant Payments Coalition, on the other side, has worked for years to deal with “hidden credit card fees” that are affecting their members.
The crypto industry obviously doesn’t want an amendment that could cause problems for their bill’s passage. But most senators would also rather not take the vote, for several reasons. Some members allied with the banking sector feel so strongly about the CCCA that they will throw over the GENIUS Act if that gets attached. “If it goes in it, the value out of the stablecoin components would not outweigh the damage done,” Sen. Thom Tillis (R-NC) told Politico. Sources tell the Prospect that the CCCA is something of a poison pill, potentially blowing up the legislation entirely.
Perhaps even more important, senators don’t want to have to disappoint the source of future campaign contributions if they can avoid it. The CCCA has been rumored to be attached to a countless number of bills in the past few years, and it always gets left at the altar, because conflict-averse politicians would rather not have to choose one industry over another.
But that’s where the regular-order problem comes in. Thune was elected to allow senators to work their will on legislation, and if he now reverses himself the first time senators try to do so, that’s a bad look. Thune has not yet reached the point of either moving forward with a CCCA amendment or cutting off amendments entirely. Another option he could take is forcing a 60-vote threshold on the CCCA or other amendments. But that would require negotiation with other senators.
As a result, the timeline has slipped. The delay hurts for several reasons. First, the drumbeat of negative commentary on the GENIUS Act—here’s a sampling from Slate, The New York Times, Talking Points Memo, The Lever, and Jared Bernstein—could really peel off supporters. The critics all make the point that a legislatively blessed stablecoin regime could facilitate scams and money laundering, while inducing global instability by integrating a volatile asset into the broader financial system. It could make banks prone to runs and collapses that recall the chaotic 19th-century panics before the Federal Reserve was established. No less an authority than Brooksley Born, who warned of the risks of financial crisis posed by derivatives, a few years before they were a primary cause of the Great Recession, wrote for American Banker that the GENIUS Act would “repeat past legislative mistakes.”
Each day that passes brings more criticism, and along with the Trump crypto corruption in the background, this could lead to wavering among the bill’s supporters. The Prospect has learned that Sen. Josh Hawley (R-MO), who voted to advance the GENIUS Act, is unlikely to vote for final passage.
Second, a legislative pileup has now formed. The Senate needs to take care of the rescission package that the Trump administration put forward last week. There’s been a lot of pressure to do a sanctions package on Russia over the Ukraine war. And the Senate has a July 4 deadline—just a few weeks away—to complete work on the giant tax-and-spend mega-bill. Not disposing of the GENIUS Act, which even if the Senate completed its work would still have to get through the House, means it may have to get in line.
Finally, the GENIUS Act was just one piece of a larger set of legislation on crypto. The industry’s biggest ask was actually for a market structure bill that would strip the Securities and Exchange Commission of most oversight and transfer it to the Commodity Futures Trading Commission. But the delay on GENIUS pushes that timeline out as well, and the continued anger at Democrats throwing in with Republicans on crypto, even as Trump is using it for self-enrichment, grows steadily hotter.
Last week, the House Financial Services Committee was scheduled to begin work on a market structure bill called the Digital Asset Market Clarity Act, after a discussion draft circulated last month. But Democrats on the committee bolted and held their own hearing, assailing Trump’s crypto offerings and pointing out faults in the market structure bill. Even Democrats who had been friendly to crypto are reacting negatively. “It would be a good thing to have more time,” Rep. Sam Liccardo (D-CA) told Politico. “Those of us who might be inclined to support this thing so that it can be bipartisan are not going to add our names to something that is associated with the rank corruption that we see out of the White House,” added Rep. Jim Himes (D-CT).
The industry sees these bills as part of a package, some of which benefits individual companies more than others. If the market structure bill stalls, some firms aren’t going to want the stablecoin bill to pass, lest they lose their leverage to get the whole package through.
In this sense, the credit card fight really could wipe out the best-laid plans of the crypto industry, after they thought they’d bought Congress last year. There’s a difference between campaigning and governing, and crypto moguls are finding that out.
