WASHINGTON, D.C. — A group of Senate Democrats who previously backed a Republican-authored stablecoin bill have announced they will no longer support the legislation in its current form, casting serious uncertainty on its future. The group, led by Senator Ruben Gallego (D-Ariz.), now opposes a floor vote on the bill unless substantial changes are made, marking a notable reversal just weeks after bipartisan momentum had appeared strong.
Background on the GOP Stablecoin Proposal
The legislation, introduced by Senator Bill Hagerty (R-Tenn.), seeks to establish a regulatory framework for U.S. stablecoin issuers—cryptocurrencies pegged to fiat currencies like the U.S. dollar. Its goals include providing legal clarity for digital asset companies and encouraging innovation within the crypto financial sector. The bill recently cleared the Senate Banking Committee and was expected to advance with some Democratic support.
Democratic Concerns Over Regulatory Oversight
However, on Saturday, nine Senate Democrats issued a joint statement voicing concerns over the bill’s lack of strong regulatory safeguards. While the statement did not cite specific provisions, the senators emphasized that the current version fails to address key issues, including anti-money laundering compliance, national security risks, and accountability for issuers. They declared they would not vote for cloture—needed to advance the bill to a final vote—without amendments.
Divisions Within the Democratic Caucus
Notably, some Democratic senators who previously supported the legislation—such as Mark Warner (D-Va.), Lisa Blunt Rochester (D-Del.), and Andy Kim (D-N.J.)—are now part of the opposition bloc. Senators Kirsten Gillibrand (D-N.Y.) and Angela Alsobrooks (D-Md.), both co-sponsors of the bill, did not sign the opposition letter, revealing a split within Democratic ranks over crypto regulation strategy.
Impact on Crypto Regulation and Market Clarity
The withdrawal of support is a major blow to those hoping for swift movement on stablecoin regulation. As the digital asset market continues to expand, industry leaders have called for clear legal frameworks to reduce uncertainty. The Democrats’ reversal suggests that federal legislation on stablecoins may face additional delays unless compromises are reached that balance innovation with consumer protection.
Path Forward: Room for Negotiation
Despite the setback, the Democratic senators emphasized their openness to further dialogue. The statement leaves room for negotiation, suggesting they may support the bill if stronger provisions are added. For now, however, the lack of consensus raises questions about whether Congress can agree on a regulatory approach as crypto markets await clear federal guidelines.
