The Senate on Monday revived a first-of-its-kind bill to regulate parts of the cryptocurrency industry, after a small number of Democrats who had joined the rest of their party in blocking the measure joined Republicans in allowing it to advance.
The vote was 66 to 32 to move forward with the legislation, which would create a regulatory framework for stablecoins, a type of cryptocurrency tied to the value of an existing asset, often the U.S. dollar. Sixteen Democrats joined the majority of Republicans in support, acting over the opposition of most others in their party, who were concerned that President Trump and his family were inappropriately profiting from crypto.
The vote was a victory for the cryptocurrency industry, which has made significant advances in Washington with the backing of Mr. Trump and a bipartisan group of lawmakers. It suggested that the measure would have enough support to pass the Senate and potentially make it to Mr. Trump’s desk in short order. A parallel effort in the House has faced similar backlash from Democrats, who earlier this month blocked a hearing on the legislation but are unlikely to have the votes to prevent it from passing.
In the Senate, a bloc of Democratic supporters had pressed in recent days to include stronger consumer protections and transparency requirements in the legislation, as well as provisions aimed at combating money laundering and terrorism financing.
But the most animating worry for Democrats was that the legislation could enable the president and his family to profit by issuing their own stablecoins. Concerns over the Trump family’s involvement in the industry intensified after reporting by The New York Times showed how a firm associated with the president had recently become one of the most influential players in the industry.
In a prolonged round of bipartisan negotiations over the bill, Republicans steadfastly refused to consider adding any provision to rein in Mr. Trump’s involvement in the industry, or make any modification that could interfere with his or his family’s ability to benefit.
“This bill provides even more opportunities to reward buyers of Trump’s coins with favors like tariff exemptions, pardons and government appointments,” Senator Elizabeth Warren of Massachusetts, the top Democrat on the Banking Committee, argued in a speech ahead of the vote.
Still, enough Democrats were willing to join Republicans to provide the 60 votes needed for the bill to move. They argued that creating a regulatory system for the growing cryptocurrency industry was important enough to outweigh concerns about the president’s conduct.
“Many senators, myself included, have very real concerns about the Trump family’s use of crypto technologies to evade oversight, hide shady financial dealings, and personally profit at the expense of everyday Americans,” Senator Mark Warner of Virginia, a Democrat who serves on the Banking Committee, said in a statement ahead of the vote.
But Mr. Warner called the bill a “meaningful step forward.”
“The stablecoin market has reached nearly $250 billion, and the U.S. can’t afford to keep standing on the sidelines,” Mr. Warner said. “We need clear rules of the road to protect consumers, defend national security and support responsible innovation.”
Since Democrats initially blocked the bill last week, negotiators have agreed to several modifications to win over opponents. One would place new restrictions on publicly traded technology companies, like Meta and Alphabet, requiring that they seek approval from a regulatory committee before issuing their own stablecoins.
That appeared to assuage the concerns of Senator Josh Hawley, Republican of Missouri, who previously joined Democrats in voting to block the bill, citing concerns over the involvement of tech companies in crypto markets. On Monday, Mr. Hawley was absent for the vote.
Among other provisions, the bill would require stablecoins, whose value is typically pegged to the dollar, to hold reserves of liquid, safe assets like Treasury bills. Issuers would also have to follow anti-money-laundering and terrorism finance rules and to give holders of coins priority to recoup their money in a bankruptcy.
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