More Crypto Nonsense

The GENIUS Act was blocked, for now, but it's apparently coming back

Author

mister mix
May 10, 2025

On Thursday, the Senate blocked the GENIUS Act, which would allow federal regulation of crypto currency pegged to the US dollar (so-called “stablecoin”). All Democrats voting, plus Rand Paul and Josh Hawley, voted to deny cloture. Majority Leader John Thune also voted against cloture but that’s just a parliamentary move to allow him to bring it up again.

According to David Dayen at the American Prospect, this is just a bump in the road:

Lat night, the Prospect reported, based on several sources, that Democrats had agreed to a modified version of the GENIUS Act, which would enable Big Tech firms to create their own private currencies. The main ask that Democrats secured was a vote on an amendment that would bar presidents and their families, senior executive branch officials, and members of Congress from issuing or sponsoring digital assets. This came after reports of Trump’s World Liberty Financial issuing a stablecoin, USD1, that was already being put into use by foreign countries to enrich the president’s company.

Republicans hold the majority in the Senate, and surely were not going to vote to rip away Trump’s crypto empire. After that, Democrats would supply the votes needed to avoid a filibuster and pass the bill, while saying that they did all they could to prevent Trump corruption.

That was, and apparently still is, the deal. But the cosmetic changes being negotiated by Sens. Ruben Gallego (D-AZ) and Mark Warner (D-VA), which would also be used to justify Democratic agreement with the bill, came so late in the process that they had not been turned into legislative text. Democrats wanted a short delay to turn that around. But Senate Majority Leader John Thune (R-SD) had scheduled the cloture vote for Thursday afternoon and was unmoved by appeals to change it.

So, if Dayen is to be believed (and he’s usually pretty accurate), this is the genius strategy:

  • Dems filibuster the GENIUS Act because their sure-to-fail amendment hasn’t hit the floor yet

  • The sure-to-fail amendment hits the floor, Dems vote for it, Republicans against it

  • Some crypto-friendly Dems vote for the GENIUS act after their performative amendment vote, using some justification (yet to be determined) for changing their vote.

If this is really the strategy, Dems must think that we’re a bunch of dumb mugs who don’t pay attention. In other words, they hate us almost as much as Republicans hate their voters. The difference is that Republicans fear their voters enough to often do what they want.

I guess the ending of this play is yet to be written, so perhaps I’m wrong, but I doubt it. When I read yesterday that Dems had voted to deny cloture, I thought they had finally decided to do the right thing.

Cryptocurrency is an obvious scam and bubble that will cause a great deal of economic ruin when it inevitably crashes. There’s no way responsible Democrats would ever vote to “regulate” (read: “permit”) cryptocurrency except for the influence of money in politics.

David Souter’s proposed text for a 2000 campaign finance case (which was removed as part of a deal with Sandra Day O’Connor) was prescient:

[The court in Buckley v Valeo] recognized a concern not confined to bribery of public officials, but extending to the broader threat that politicians grown dependent on large contributions will lose critical independence and instinctively identify interests of a plutocracy with the public good.

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