Trump’s crypto agenda threatened by his pursuits of private profits

President Donald Trump is standing in his own way with regards to passing crypto laws.

Lawmakers this week rejected the GENIUS Act — a bill meant to ascertain federal rules for stablecoins — due partly to concerns that President Trump’s personal cryptocurrency ventures have created an unprecedented conflict of interest.

“Currently, individuals who want to cultivate influence with the president can enrich him personally by buying cryptocurrency he owns or controls,” Sen. Jeff Merkley, D-Ore., said in an announcement to CNBC explaining his opposition to the bill. “It is a profoundly corrupt scheme. It endangers our national security and erodes public trust in government.”

Stablecoins are digital currencies which might be pegged to the worth of other assets, just like the U.S. dollar.

Getting anything passed in Congress is a steep uphill battle for Republicans given their razor-thin majority within the House, filibuster-proof requirement within the Senate, and Democrats’ increasingly unified stance against President Trump’s agenda. But enough Democrats gave the impression to be on board with a stablecoin law to bring a couple of rare bipartisan win for the president.

That is until $TRUMP got in the way in which.

The president’s meme coin, which he launched just before the inauguration in January, has added billions of dollars of paper price to his coffers. Its value soared last month after the project ran a promotion offering top $TRUMP holders a dinner with the president and a “VIP White House tour.” Sen. Richard Blumenthal, D-Conn., called it a “pay-for-play scheme.” First Lady Melania Trump has a coin as well.

The GENIUS bill didn’t advance within the Senate on Thursday. It needed 60 votes to maneuver to the Senate floor for final passage. The ultimate tally was 48 in favor and 49 against. Three senators didn’t vote.

Earlier within the week, Senate Democrats unveiled the “End Crypto Corruption Act,” spearheaded by Merkley and Minority Leader Chuck Schumer of Recent York, meant to ban elected officials and senior executive branch personnel and their families from issuing or endorsing digital assets.

But the important thing defections to the stablecoin laws got here last weekend, when a bunch of nine Senate Democrats — 4 of whom had previously voted for the bill in committee — said that they would not support it and called for stronger provisions to deal with “anti-money laundering, foreign issuers, and national security.”

Reports have indicated that Abu Dhabi-based MGX is using Trump’s stablecoin for a $2 billion investment in crypto exchange Binance, creating one more potential conflict of interest for a sitting president.

For some investors and entrepreneurs within the crypto industry, the president’s pursuit of private profits is creating a serious impediment to long-awaited advancements. After years of setbacks in the course of the Biden administration, the crypto lobby became a strong force in funding Trump’s 2024 campaign and in successfully backing industry-friendly candidates for Congress.

“It’s unlucky that private business is getting in the way in which of excellent policy,” said Ryan Gilbert, founding father of fintech enterprise fund Launchpad Capital. “I’d hope that everyone within the administration, including the president, gets out of the way in which of excellent policy.”

The White House didn’t reply to a request for comment. At a press conference on Friday, White House press secretary Karoline Leavitt said, when asked concerning the meme coin dinner, that “the president is abiding by all conflict of interest laws.”

“The president is a successful businessman, and I feel it’s one of the numerous reasons that individuals reelected him back to this office,” Leavitt said.

Various top Democrats, including Sen. Elizabeth Warren of Massachusetts and Kirsten Gillibrand of Recent York have joined the parade of critics, targeting President Trump’s personal pursuits. Gillibrand helped introduce the GENIUS Act earlier this 12 months, but she said this week that there are “numerous outstanding issues that needed to be addressed before the bill could pass the total Senate.”

“I consider it is important to the long run of the U.S. economy and to on a regular basis Americans that we enact strict stablecoin regulations and consumer protections where none currently exist,” Gillibrand said in an announcement. “I remain extremely confident and hopeful that very soon we will finish the job.”

Sen. Blumenthal called for an investigation into Trump-linked coins, demanding financial records from World Liberty Financial and slamming the president for “the attempted use of the White House to host competitions to prop up the worth of $TRUMP.”

Sen. Ruben Gallego, D-Arizona, had supported the GENIUS Act but said he couldn’t move forward this week after Republicans declined to offer more time to barter.

“Without more time to at the least finish the bill, there was no true bipartisan path forward,” he wrote on X.

Launchpad’s Gilbert said the GENIUS Act is just the primary piece. More broadly, the president’s conflicts could have an effect on hopes for other legislative achievements and deregulation efforts in addition to the fame of the U.S. crypto industry on the world stage.

“We will likely be the laughing stocks of the world for this particular reason, and it should hold back continued investment and innovation,” Gilbert said. “There was hope for the past six months that that we could lead on in the USA, and that investment should pour into crypto-related businesses, after which it should be simpler and doable again, for all firms to take a lead and to take a position in crypto assets.”

Nonetheless, he said, “if the GENIUS Act doesn’t pass, we’re back to square one.”

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