Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—Senate majority leader expedites GENIUS Act vote to regulate stablecoins, (May 2, 2025)
Organizations Mentioned:Office of the Comptroller of the Currency | Public Citizen
By Jonathan Anderson
Opponents say the measure would “make it easier for the President and his family to line their own pockets.”
On May 1, 2025, Senate Majority Leader John Thune (R-S.D.) took steps to expedite a vote on the GENIUS Act, which establishes a regulatory framework for payment stablecoins. The move comes amid reports that a firm backed by the United Arab Emirates government is planning a $2 billion transaction using digital currency tied to President Donald Trump and his family. Other senators and public interest groups say the legislation and planned deal raise major conflicts of interest for the president.
GENIUS Act. On March 13, the Senate Banking Committee voted 18-6 to advance the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act (see Banking and Finance Law Daily, Mar. 14, 2025). The bill defines a payment stablecoin as a digital asset used for payment or settlement that is pegged to a fixed monetary value. It establishes procedures for institutions seeking licenses to issue stablecoins and implement reserve requirements and tailored regulatory standards for stablecoin issuers.
The act provides protections for overseas stablecoin regulation and international agreements to improve cross-border transactions, and broadens the definition of “Comptroller-regulated entities.” In addition, stablecoin issuers would be required to comply with legal orders to block, freeze, or seize assets, including foreign stablecoins. The legislation grants states the authority to regulate stablecoin issuers with a market capitalization of up to $10 billion, while larger issuers may remain under state supervision if they meet specific regulatory requirements.
Sen. Bill Hagerty (R-Tenn.) introduced the GENIUS Act in March (see Banking and Finance Law Daily, Mar. 11, 2025).
Expedited process. On May 1, Thune issued a press release announcing that he “initiated a process that expedites a vote” on the GENIUS Act. The press release included quotes from several Republican members of the Senate, including Banking Committee Chairman Tim Scott (R-S.C.). “I look forward to voting for the bill on the floor and the Senate taking historic action to provide the industry with the clarity it deserves,” Scott said.
Trump-backed stablecoin. Thune’s announcement comes amid reports that a firm backed by the United Arab Emirates government is planning a $2 billion deal using the “USD1” stablecoin by World Liberty Financial (WLF), a cryptocurrency company controlled by Trump and two of his sons. If the transaction occurs, it could spur hundreds of millions of dollars in revenue for Trump and his family, according to press reports.
Warren opposes GENIUS Act. Sen. Elizabeth Warren (D-Mass.), the ranking member of the Senate Banking Committee, issued a statement on May 1 opposing passage of the GENIUS Act citing the United Arab Emirates transaction. “A shady fund backed by a foreign government just announced it will make a $2 billion deal using Donald Trump’s stablecoins,” Warren said. “Meanwhile, the Senate is gearing up to pass the ‘GENIUS’ Act - stablecoin legislation that will make it easier for the President and his family to line their own pockets. This is corruption and no senator should support it.”
Public Citizen statement. Robert Weissman, co-president of the public interest group Public Citizen, issued a statement raising concerns about the proposed $2 billion business deal involving Trump’s coin. “Will the U.S. Congress permit this mockery of the American people? Or will it insist on the most minimal baseline standards, so that foreign governments cannot send money directly to the president and his family?” Weissman said, in part.
Conflict-of-interest concerns. In March, several Democratic senators raised concerns that Trump could sign legislation to enable the launch of his own stablecoin and then retain authority to regulate his own financial company (see Banking and Finance Law Daily, Mar. 31, 2025).
The senators in a March 28 letter to the Federal Reserve and the Office of the Comptroller of the Currency said the planned launch of the Trump USD1 coin “presents an extraordinary conflict of interest” that could “create unprecedented risks” to the U.S. financial system and the integrity of financial regulators.
Among their concerns, the lawmakers said that pursuant to his executive order directing all agencies to submit all “proposed and final significant regulatory actions” to the White House for approval, the president could “review any actions the OCC takes with regard to USD1’s stablecoin application.” Trump would also be “positioned to intervene in and deny the OCC from promulgating stablecoin safeguards, or force the agency to refrain from initiating any enforcement actions” against WLF, the senators said.
The letter was signed by Warren; Ron Wyden (D-Ore.), the ranking member of the Senate Finance Committee; Senate Banking Committee members Chris Van Hollen (D-Md.) and Jack Reed (D-R.I.); and Sen. Cory Booker (D-N.J.).
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