Democratic supporters of the measure to regulate parts of the industry refused to allow it to move forward amid concerns in their party that President Trump and his family are profiting from cryptocurrency.
A first-of-its-kind bill to regulate parts of the cryptocurrency industry stalled in the Senate on Thursday, after Democrats blocked it amid concerns in their party about how President Trump and his family are profiting from crypto.
On a vote of 48 to 49, the measure failed to muster the 60 votes necessary to advance. It would have regulated so-called stablecoins, a type of cryptocurrency tied to the value of an existing asset, often the U.S. dollar. The vote was a setback for the industry, which has made significant advances in Washington with the backing of Mr. Trump and a bipartisan group of lawmakers.
The legislation has divided Democrats, many of whom were reluctant to back legislation that could benefit Mr. Trump, whose ties to the industry have prompted corruption allegations.
As the stablecoin bill began making its way through Congress, a bipartisan group of senators on the Banking Committee supported it, voting in March to send it to the Senate floor for a full vote. At the time, the measure appeared to be on a glide path toward passage, with proponents confident they would be able to deliver a bipartisan bill to Mr. Trump’s desk over the summer.
But less than two weeks after the banking panel’s action, reluctance began brewing among other Democrats on Capitol Hill when a cryptocurrency firm affiliated with the president’s family, World Liberty Financial, announced it would issue a stablecoin. Democrats’ concerns deepened after the Trump-affiliated firm inked a deal with an Emirati venture fund backed by the government of Abu Dhabi that would grant them $2 billion in deposits.
Democratic backers also had concerns that the bill lacked provisions to crack down on money laundering in the industry or guarantee that bad actors who had been barred from engaging in traditional American financial markets would not be able to use the cryptocurrency to regain a foothold.