The Republican and Democratic parties have been unable to agree on the proposed stablecoin legislation set to be voted on this week in the Senate.
According to reports from Washington, up to nine Democrat Senate representatives who had previously supported the stablecoin bill have opposed it in its current format.
Republicans have taken the lead on the formation of the bill and have so far been able to get the legislation passed by the Senate Banking Committee in March 2025. But four Democrats have recently come out and stated their intention to not support the bill as it currently stands.
Democratic Senators, Lisa Blunt, Ruben Gallego, Andy Kim and Mark Warner were four of nine party representatives to support the passing of the stablecoin bill last March. However, the quartet signed a statement signalling their intention to oppose the bill during its first procedural vote expected this week.
The statement outlined that “the bill as it currently stands still has numerous issues that must be addressed,” and “would be unable to vote for cloture should the current version of the bill come to the floor”.
This stance from the Democratic Senate representatives comes at a critical juncture for the state-of-play for stablecoin regulation in the US, with the bill needing at least seven votes in support to pass the approval of the Senate.
If successful, the stablecoin bill would be the first comprehensive legislation surrounding a digital asset element within US financial law.
Drafted by the House Financial Services Committee and the House Agriculture Committee, its latest draft proposed for new provisions to be placed on stablecoin issuers in the US, seeking for greater regulatory clarity and transparency.
Elements of the draft bill contain classifications for ‘digital asset custodians’ and ‘digital commodity’ as a means to provide active crypto exchanges and digital asset companies in the US abide by certain guidelines and rules to follow.
This has been a fundamental part of the US crypto sector’s concerns when it came to the previous Joe Biden administration between 2022 and 2024. The US Securities and Exchange Commission (SEC) under Biden’s term often approached crypto companies in the US in a more aggressive manner, issuing lawsuits to the likes of Binance, Crypto.com and Coinbase over perceived beliefs that digital assets should be classed under the same ‘securities’ laws as traditional financial instruments.
Brian Armstrong, CEO of Coinbase, has been one of the more vocal proponents of calling for more regulatory clarification, and shared his views on X on Monday (5 May) regarding the upcoming vote on the stablecoin bill.
Why did the Democrats divert?
The Democratic Party has taken a more cautious stance to the drafting of the bill, focusing on tight regulations that centred around consumer protection.
Their Republican counterparts however, have often looked to the digital asset sector as an area of economic growth, spearheaded by President Donald Trump.
The nine Democratic Senate representatives are preparing to place a vote of no confidence if an official vote happens in the Senate this week.
This is not the first time the bill has faced resistance from the opposition party. Former Chair of the House Financial Services Committee, Patrick McHenry, made it a priority to take the bill up to the Senate last year.
While the amended bill ultimately passed last March, there were concerns from both sides of the Democratic spectrum regarding the surging growth of the stablecoin market.
With the likes of PayPal introducing its own native stablecoin in the form of PYUSD, Democrats such as Maxine Waters said she was ‘deeply concerned’ regarding the digital currency’s ability to cause financial instability.
Given the Republican Party holds the Senate majority the stablecoin bill has been fast tracked, yet certain concerns from Democratic leaders still ring true currently.
The passing of the bill ultimately comes down to if a harmonisation of innovation and regulation of stablecoin provisions can be achieved, which may serve as a future forecast for how financial legislations will be contested under Trump’s second term.
