Senate prepares key vote on Trump-backed stablecoin bill
Senate Majority Leader John Thune has scheduled a key procedural vote for Wednesday on stablecoin legislation backed by both the crypto industry and President Donald Trump.
The vote, which needs backing from 60 senators, paves the way for the bipartisan legislation to be passed quickly in the coming days.
This came after revisions last month that attracted the support of crypto-friendly Democratic senators like Angela Alsobrooks and Mark Warner.
John Thune focuses on adding competition in credit card processing with the bill
The stablecoin bill is crucial as it would create rules for dollar-pegged tokens used to make payments. It is worth noting that the stablecoins must be backed by reserves kept in short-term investments, such as those overseen by federal debt or state regulators.
As the Senate gets ready to vote on a stablecoin bill with support from Trump, debates have been sparked concerning the bill.
Progressive Democrats have voiced concerns that the bill lacks safeguards to prevent stablecoins from endangering the financial system or being exploited by criminals. They also argue it overlooks the issue of Donald Trump profiting from his own cryptocurrency ventures.
However, Thune’s move to cut off debate on the bill virtually aims that the legislation will contain language pressed by retailers and their allies in the Senate to force competition into Visa Inc. and Mastercard Inc. in credit card processing.
To support this claim, the proposal, backed by Republican Senator Roger Marshall and Democratic Senator Dick Durbin, would require major banks to let merchants choose from multiple credit card networks.
This includes alternatives to Visa and Mastercard. The aim is to boost competition and reduce transaction fees for merchants.
On the other hand, Senate Banking Chairman Tim Scott has indicated that his committee might look at the credit card rules as separate legislation instead of including them in the stablecoin bill.
This did not stop Marshall from focusing on achieving his goal. On Monday, June 9, Marshall mentioned that he was planning his next move and wanted to schedule a vote on the legislation sometime soon.
A Senate aide said late Monday that talks are continuing on the bill and that senators could still offer floor amendments.
The stablecoin bill faces criticism as worries grow among individuals
A stablecoin linked to the Trump family has seen its market value soar past $2 billion since its announcement in March, but it has also faced criticism.
However, Democratic Senator Mark Warner of Virginia, a key Banking Committee moderate, said he would back the measure. He also mentioned that worries about the Trump family’s business activities should not prevent progress on broader stablecoin legislation.
Warner described the legislation as “not perfect but far better than what we currently have.”
On the other hand, the progressive faction of the party, led by Elizabeth Warren, the highest-ranking Democrat on the Senate Banking Committee, strongly opposed it. During an early vote, Warren and Senator Gillibrand had a heated exchange on the Senate floor.
Warren shared a new analysis from her staff criticizing the bill for not including any bans on Trump and his family benefiting from cryptocurrencies regulated by his administration. The analysis also pointed out loopholes that could let criminals and terrorists misuse stablecoins for transactions outside traditional banks.
Warren cautioned that passing this bill means they can expect more anonymous buyers—big companies and foreign governments—to use the president’s stablecoin as a secret bank account free from government oversight and as a way to pay off the president personally. She added that for criminals, it was a two-for-one deal.
Bankers also worry that stablecoins might take away bank deposits and make it harder for small businesses and farmers to get loans. These groups often depend on banks for credit. So far, bankers have tried — mostly without success — to prevent big companies, like tech firms or retailers, from creating their own tokens.
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Original reporting: cryptopolitan.com
