The News
Democrats are shifting their strategy for opposition-party policymaking in real time this week. And they’re using a fight over cryptocurrency, a topic very important to President Donald Trump.
Nine pro-crypto Democratic senators are withholding their votes for legislation that would create rules for stablecoins — a type of crypto pegged to assets like the US dollar — in hopes they can convince Republicans to beef up the bill’s provisions on national security and consumer protection.
“If changes aren’t made — not only will I vote no, but I’ll urge all my colleagues to vote no,” Sen. Mark Warner, D-Va., told Semafor.
The rebellion comes as progressives escalate their criticisms of the Trump family’s crypto business after it reportedly struck a deal with an Emirati firm. It also comes with the blessing of Senate Minority Leader Chuck Schumer, whose caucus has clearly learned from its painful divisions earlier this year over immigration in January and government funding in March.
Democrats are still torn over crypto. And crypto’s Senate allies are fighting to insulate the stablecoin bill from their progressive colleagues’ concerns over the president’s conflicts of interest: “Doing nothing is not a logical reaction to Trump,” bill sponsor Sen. Kirsten Gillibrand, D-N.Y., told Semafor.
But Schumer worked this week to unify his caucus around demanding changes to the bill rather than letting Democrats splinter on the first floor vote. After persistent fury from the left over his handling of government funding, he’s taken a firmer hand on crypto and openly sided with progressives — what may be a taste of things to come this year as the party takes advantage of the filibuster, its last leverage over Trump’s agenda.
“The stablecoin bill does not have the necessary protections to curb Donald Trump’s overt corruption,” Sen. Elizabeth Warren of Massachusetts told Semafor Tuesday. The top Democrat on the Senate Banking Committee privately circulated a wide-ranging list of concerns over the weekend, seen by Semafor, that included the Trump family’s launch of its own stablecoin.
“I’m very glad that [Schumer’s] adopted our position,” Warren added. “What’s happened with Donald Trump’s stablecoin issuance in just the past two weeks has gobsmacked both Republican and Democratic senators.”
Sen. Cynthia Lummis, R-Wyo., said that Republicans were truly surprised by something else: the Saturday statement about her stablecoin bill by the nine pro-crypto Democrats, including four who had previously voted for it in committee.
The group huddled Tuesday with Schumer, Gillibrand and the bill’s other Democratic cosponsor, Sen. Angela Alsobrooks of Maryland; Lummis met again with Schumer Tuesday afternoon.
“I have a sense that this is caught up in other issues,” Lummis said. Fellow stablecoin bill sponsor Sen. Bill Hagerty, R-Tenn., was more blunt, calling the statement “ridiculous” and “a huge foul.”
Kara Calvert, who helms US policy for crypto exchange Coinbase, echoed Lummis in concluding that the bill has gotten swept up “into something that is a much larger political issue.”
Know More
Neither Lummis nor Calvert said it directly, but the Trump family’s crypto business is what’s bogging down the stablecoin measure. Joining Warren in connecting the bill to potential presidential corruption risks is Sen. Bernie Sanders, I-Vt., who’s planning an event on Wednesday.
Pro-crypto Democrats are left to remind their progressive colleagues that the Trumps’ digital assets deals predate the stablecoin bill.
“Donald Trump will still be here in a couple years, and he will still be his rough self, no matter what,” Sen. Ruben Gallego, D-Ariz., told Semafor. “So we’re just trying to get the best bill that’s going to survive.”
Yet despite the noise around Trumpworld’s crypto ventures, many of the Democrats’ requested edits are related to other issues — like policing stablecoin firms based outside the US — instead of potential conflicts of interest within the administration.
One lobbyist described the Democrats’ requests as “calling a foot fault” after they felt they weren’t sufficiently consulted on the version of the bill, seen by Semafor, that was going to hit the floor.
As senators in both parties shuttled between Tuesday meetings aimed at finding a deal, it remained unclear whether GOP leaders would force a stablecoin vote this week after all.
Senate Majority Leader John Thune would not directly say whether he would still try but seemed annoyed by Democrats’ maneuvering: “My question is, when will the Democrats take yes for an answer?”
Sen. Josh Hawley, R-Mo., told reporters that he has his own concerns over how the legislation polices the tech sector and that he’s not sure if it would survive a filibuster.
Eleanor and Burgess’ View
Pro-crypto Democrats — and the Republicans who remain invested in winning their support — are in a tough spot right now as Schumer refines his approach to using his leverage.
Their relatively narrow bill has gotten sucked into a far bigger debate about how the president should be allowed to make money, even though no one expects any language related to those conflicts of interest to be added to the legislation.
Now, crypto backers must successfully divorce the stablecoin measure from Trump’s digital asset plans without isolating any of the parties involved. If the bill has any hope of passing the Senate, they’ll need to make changes extensive enough that Democrats can claim a win, but limited enough that they don’t isolate Republicans.
Beyond crypto, it’s clear that Democrats are stiffening their opposition to Trump. Any bipartisan legislation is going to be a lot tougher than January’s relatively easy win on the Laken Riley Act.
It could be worse, though — and it is in the House, where Rep. Maxine Waters, D-Calif., on Tuesday walked out of a joint hearing of the Financial Services and Agriculture committees where members were meant to take their first steps toward a bigger overhaul of crypto regulation. That legislation is likely to be a much heavier lift, especially after this week’s drama.
Room for Disagreement
Not every pro-crypto Democrat is convinced that the Senate is headed for a crackup over the bill. Warner, who insists Republicans knew “for many, many weeks” about their concerns, says he is “optimistic” they can reach an agreement.
In addition, Schumer remains sensitive to not offending pro-crypto Democrats — a contingent he himself has sided with by supporting crypto-friendly legislation in the past. Sen. Ben Ray Luján, D-N.M., said Schumer’s role was “not surprising” given his hands-on nature.
Notable
- Axios first reported on the closed-door meeting last week where Senate Democrats pumped the brakes on the stablecoin bill.
- Republican aides told Politico afterward they were still hopeful they could get the lawmakers who penned Saturday’s statement to support the legislation.