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After weeks of turmoil, a bipartisan bill that would create rules for digital assets known as stablecoins is at last on track to pass the Senate.
It was supposed to be one of the GOP’s easiest aisle-crossing wins this Congress.
Instead, bitter fallout has transformed it into the most vivid example yet of how hard it is to strike a deal in President Donald Trump’s Washington. It’s a textbook case pointing to more challenges ahead.
“It has been murder to get them there,” the normally even-keeled Sen. Bill Hagerty, R-Tenn., said at a conference last week of the 18 Senate Democrats who eventually sided with Republicans. “The first time we brought this to the floor, [Massachusetts Sen.] Elizabeth Warren was able to get every one of them to vote against me.”
Trump’s legislative agenda began with a jolt when Democratic lawmakers unexpectedly broke ranks to support the GOP-led Laken Riley Act, which required tougher punishments for undocumented immigrants arrested for certain crimes.
But now, Congress is bogging down amid Trump-fueled collisions. The escalating standoff poses a threat to other issues than cryptocurrency — from trade and appropriations to banning congressional stock trading and expanding access to privately traded investments.
Republicans first took up legislation governing stablecoins, which are pegged to other assets like the dollar, because they saw it as the lightest lift of the crypto bills the president wants on his desk by August. But their bipartisan plan to legitimize one of the least risky corners of a deep-pocketed industry became, well, all about Trump.
The Trumps’ plans to strike a stablecoin deal with an Emirati firm and host a fundraiser dinner for memecoin buyers sparked progressive rage that contributed to the implosion of bipartisan talks last month. Republicans frustrated over the hold-up pushed ahead with a doomed procedural vote.
Hagerty and the bill’s supporters then landed a series of compromises to secure enough support to advance the bill — and the Senate is expected to pass it this month. But votes on a to-be-determined series of amendments will inevitably reopen all the same faultlines.
It’s a key indicator of just how difficult working across the aisle is during Trump’s presidency — even on an issue that has millions of dollars at its back. Crypto executives who spent big last Congress to strong-arm lawmakers into supporting industry-friendly legislation acknowledge those efforts are now less potent.
“Trump isn’t making it easy,” said one crypto lobbyist, who was granted anonymity to speak candidly. “It’s just really annoying, all the stuff that his family is doing.”
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As the president tests the bounds of executive power, progressive Democrats like Warren are pushing back on advancing anything that doesn’t rein Trump in. Republicans like Hagerty ascribe that to partisan bitterness — leaving them reluctant to offer concessions that could even appear to challenge the president.
For instance, it’s easy to see Trump’s recent comments over relinquishing the government’s stake in mortgage giants Fannie Mae and Freddie Mac — and the ensuing Democratic outcry — complicating the bipartisan talks over making housing more affordable.
The Senate led the way on a round of bipartisan deals during Joe Biden’s first two years as president. This Trumpy Congress looks a lot less likely to do so.
House progressives came within inches of striking a deal with Republicans on stablecoins last Congress — and 71 Democrats, including former Speaker Nancy Pelosi, eventually helped pass an overhaul on the House floor. Tensions are far higher this year.
“The challenge that both parties are having is that this issue has become much more than about the fairly straightforward approach to stablecoins,” said Kara Calvert, who helms US policy for crypto exchange Coinbase.
House Financial Services Committee ranking member Rep. Maxine Waters, D-Calif., stormed out of a recent joint hearing on crypto legislation earlier in protest of the Trumps’ dealmaking. That left Democrats to decide whether to follow — or stay to discuss a compromise.
“We have a responsibility to be here and be part of the solution,” said House Agriculture Committee ranking member Angie Craig, D-Minn., who stayed. Still, she criticized “the stealth dealing from the Trump administration related to hawking memecoins from the White House.”
When the Senate reconvenes Monday to take back up the stablecoin bill, progressives will push to prevent Trump from profiting off affiliated digital assets — again exposing many of the same fault lines. It’s a no-go for Republicans, and the bill’s Democratic authors call it redundant.
“Congress should not pass a stablecoin bill that acknowledges that stablecoins can be a vehicle for corruption — and exclude Donald Trump from the bill’s reach,” Warren, the top Democrat on the Senate Banking Committee, told Semafor.
Crypto skeptics off the Hill want Senate Democrats to take a harder line. They point to Senate Majority Leader Chuck Schumer’s effort to stall Trump’s Justice Department nominees in protest of Qatar’s offer to give him a jet.
“You’re willing to place a redline on the Qatari jet deal, but you’re not willing to do the same thing for what’s arguably a financially larger and equally problematic quid pro quo or conflict of interest blooming?” said Mark Hays, associated director for cryptocurrency and financial technology at Americans for Financial Reform.
If the Senate can muscle through, House Republicans want to include the stablecoin bill in a more sweeping overhaul. But the stablecoin clash has everyone bracing for a much harder fight.
“I had no idea how hard this was going to be,” said Sen. Cynthia Lummis, R-Wyo.
Eleanor’s view
The left’s issues with crypto extend far beyond Trump, so a version of this blowup was unavoidable. Progressives slamming the Trumps’ dealmaking also have outstanding concerns over other provisions in the stablecoin bill — including how it treats tech companies.
Still, no one expected this bill to go so far off the rails. It’s easy to foresee similar future devolvements — particularly as Schumer faces sustained pressure to align with the left after a bruising government funding fight.
The View From the white house
The administration says the Trumps’ crypto deals are above board, so they shouldn’t have a bearing on congressional negotiations.
“President Trump is dedicated to making America the crypto capital of the world,” White House deputy press secretary Anna Kelly told Semafor. “His assets are in a trust managed by his children, and there are no conflicts of interest.”
Notable
- Rep. Sam Liccardo, D-Calif., is “not eager to hold up regulation of an industry that desperately needs regulation” if Democrats can’t coalesce around a way to stop Trump from making money off digital assets, Politico reports.
- Rep. Jamie Raskin, the top Democrat on the House Judiciary Committee, opened a probe into a dinner Trump hosted for the top buyers of his memecoin, The Washington Post reports.