Crypto Bill Backlash: Senators Warn Stablecoin Act Isn’t Safe

What began as a promising effort to apply transparent rules to crypto and stablecoins has run into a serious roadblock.

On May 4, 2025, ten US Senators came out swinging against the revised version of the “GENIUS Act,” stating that it might do more harm than good. The action, according to an X post by crypto journalist Eleanor Terrett, caught many off guard, particularly because some of the individuals on the list had supported the bill just weeks earlier.

Among the opposing critics are four Democrats—Ruben Gallego, Mark Warner, Marilyn Strickland Kim, and Lisa Blunt Rochester—who were all in support of the bill in March in the Senate Banking Committee hearing.

NEW: Senator @RubenGallego and nine other senators just issued a joint statement regarding the updated text of the GENIUS Act that was released last week, saying they cannot support the bill in its current form. The group notes several concerns, including insufficient… pic.twitter.com/876m4wCVda

— Eleanor Terrett (@EleanorTerrett) May 3, 2025

Their change adds fresh weight to mounting concerns the proposed rules have the potential to undermine anti-money laundering protections and put financial stability at risk. Angela Alsobrooks, a co-sponsor of the bill from its inception, refused to sign the opposition letter.

Senators’ Alarm Bells Ring Over National Security And AML Loopholes

From the joint statement issued by the senators, the latest draft bill omits essential safeguards. The concerns of theirs are most prominent regarding national security and a weak presence of anti-money laundering (AML) protections. They also cautioned against ambiguous regulations that may expose crypto markets to exploitation.

The legislation, technically titled the “Guiding and Establishing National Innovation for US Stablecoins Act,” was proposed in February 2025. Supporters said it would allow the US to remain competitive in financial technology without endangering consumers. But this latest backlash is an indication lawmakers are not all on the same page when it comes to “safe.”

Crypto Investors Left In The Dark Again?

The backlash adds more unpredictability into an already volatile crypto market. Only one day before the senators issued their statement, the new language in the bill was revealed. Traders and investors who were awaiting clarity are now left waiting once again. If lawmakers cannot make up their minds on the gist of the bill, it may be months before any version gets signed.

That sort of delay can be damaging. Payment stablecoins are pegged to the US dollar and are frequently employed as a haven in times of turbulent market fluctuations. Without clear direction from legislators, crypto exchanges and developers might be reluctant to develop or expand within the US.

The backlash is notable because it occurs as the Senate is attempting to rush the bill through — and as news organizations investigate US President Donald Trump’s crypto ventures and potential connections involving his relatives.

Among the bill’s objectives are spurring innovation where blockchain and artificial intelligence intersect. That’s why opposition from the senators is causing eyebrows to be raised in the tech community, as well.

Tokens backing AI programs created on blockchain could be indirectly impacted if money and policy backing become mired in Washington’s political stalemates.

Featured image from Bitwave, chart from TradingView