Momentum for a comprehensive regulatory framework for cryptocurrencies has slowed in the U.S. Senate, reducing chances of passage this year. Ohio Republican Sen. Bernie Moreno, a former crypto entrepreneur leading negotiations, highlighted disputes over stablecoin rewards as the primary obstacle. This follows last July's GENIUS Act, which regulated stablecoins but left broader crypto oversight unresolved.
In Washington, D.C., Sen. Bernie Moreno provided an update on efforts to establish a regulatory framework for all cryptocurrencies, noting that progress has stalled in the Senate. The legislation aims to extend beyond the GENIUS Act, signed into law by President Donald Trump last July, which introduced the first major federal rules for stablecoins—digital assets pegged to the U.S. dollar. That act prohibited stablecoin issuers from offering interest but permitted rewards, such as points akin to credit card perks.
The current impasse centers on whether stablecoin providers should be allowed to offer such rewards. Crypto firms argue these incentives are vital for market competitiveness, while banks express concerns that they might encourage consumers to shift funds from traditional savings accounts to stablecoins. "There’s some concern among banks, that’s quite frankly misplaced, that somehow people will empty out their bank accounts and start buying stablecoins," Moreno stated.
As a key negotiator, Moreno voiced frustration over the holdup, emphasizing that revisiting the GENIUS Act's provisions on stablecoins is unnecessary. "The number one issue that’s holding us back right now is some that want to revisit the GENIUS Act, which really shouldn’t be revisited," he said. "That’s not good public policy."
Moreno's advocacy aligns with his background in crypto and contrasts with his predecessor, Democrat Sherrod Brown, who criticized earlier proposals as insufficient for consumer protection. The senator defended the push for new rules, saying, "This is actually regulating an industry that’s currently not regulated. So this isn’t about eliminating regulations and actually putting them on so that there are guardrails."
The crypto sector invested $40 million supporting Moreno during the 2024 election. Further challenges include Democratic calls for ethics measures to restrict officials' crypto involvement, citing ties involving President Trump and his family.
