Encryption industry welcomes good news? Stablecoin bill progresses in the U.S. Senate.

Stablecoin legislation has overcome procedural blockades in the US Senate as a group of Democratic lawmakers on Monday abandoned their opposition, marking a major victory for the cryptocurrency industry. The industry-supported regulatory bill is currently being debated in the Senate, with a bipartisan group hoping to pass the bill as early as this week, although senators have indicated that a final vote may have to wait until after the Memorial Day recess. Earlier this month, Democratic lawmakers had united to block the legislation due to concerns about cryptocurrency transactions involving former President Trump and other issues related to stablecoin regulation. However, on Monday night, the Senate ended this blockade with a vote of 66 to 32. Democratic lawmakers friendly to cryptocurrencies, led by New York Senator Kirsten Gillibrand and Maryland Senator Angela Alsobrooks, negotiated modifications to the bill and urged their colleagues to support it, even if it meant Trump and his family could profit from many cryptocurrency companies controlled by their family during his time in office. Stablecoins related to the Trump family have a market value of over $2 billion since their announcement in March, sparking criticism. However, Senator Mark Warner, a Democratic senator from Virginia, announced on Monday that he would support the measure, adding that concerns about the Trump family's business transactions should not affect broader stablecoin legislation. Warner, a moderate influential member of the Senate Banking Committee, stated that the legislation is "not perfect, but much better than the status quo." Nevertheless, Democratic progressives, led by Senate Banking Committee Democratic leader Elizabeth Warren, remain strongly opposed. In a vote on Tuesday night, Warren and Gillibrand engaged in heated debate on the Senate floor. Warren released a new staff analysis report attacking the bill, highlighting the lack of provisions prohibiting Trump and his family from profiting from government-regulated stablecoins, as well as loopholes that could allow criminals and terrorists to use stablecoins for transactions outside the traditional banking system. She stated, "Passing this bill means we can expect more anonymous buyers, large corporations, and foreign governments to use the President's stablecoins as an unregulated shadow bank account while also using it as a way to pay the President personally. It's a win-win for fraudsters." Warren also repeatedly warned that the bill lacks adequate safeguards to prevent stablecoins from endangering financial system stability, and that if a major stablecoin were to fail, systemic risks could trigger taxpayer-funded bailout requests. Unlike traditional bank accounts, stablecoins are not protected by federal deposit insurance, meaning holders would be subject to bankruptcy proceedings if the tokens failed. Bankers have also expressed concerns about stablecoins draining bank deposits and reducing credit channels, especially for small businesses and farmers who rely heavily on bank loans. Bankers have been lobbying to ban large tech companies or retailers from issuing their own tokens, but so far, these efforts have mostly been unsuccessful. However, bankers have won some key concessions, including a ban on stablecoins offering interest to depositors. Coinbase CEO Brian Armstrong opposed this ban, envisioning stablecoin accounts eventually evolving into alternatives to traditional bank accounts. Allowing stablecoins to offer interest or other bonuses could attract more consumers to ditch banks. Meanwhile, the industry advocacy organization Stand With Crypto stated that it would use this measure as a "key vote" to gauge senators' positions on crypto. Some Democratic supporters of the crypto industry have received support worth $10 million through various political action committees and super PACs, while the industry has spent $40 million to help defeat Senate Banking Committee Chair Sherrod Brown and replace him with Republican Bernie Moreno, a wealthy entrepreneur and crypto enthusiast. Retailers are also lobbying for the bill, hoping to profit from cheaper and faster transactions compared to traditional payment methods like credit cards and debit cards. According to a Nielsen report, US businesses paid over $187 billion in swipe fees last year. The House Financial Services Committee has approved its own stablecoin measure, but it has not yet passed the House. Some House Republicans are hoping to merge it with a subsequent bill on regulating cryptocurrencies more broadly. Before the final version can be sent to Trump's desk, the House and Senate must reconcile any differences in the legislation.