The GOP’s tax cut megabill isn’t the only one of President Donald Trump’s priorities in jeopardy on Capitol Hill. Republicans have an unexpected crypto problem, too.
Crypto turmoil is unfolding in the Senate after nine key Democrats led by Sen. Ruben Gallego (Ariz.) said this weekend that they would oppose GOP-led legislation that would carve out new rules for so-called stablecoins.
The Democrats’ surprise shift is an urgent problem for Senate Republicans, who are trying to expedite a floor vote on the bill by late May and give Trump a big, beautiful crypto bill to sign soon.
Why does it matter? The crypto fight is one of the first major tests of Republicans’ ability to work across the aisle in the second Trump era. Unlike budget reconciliation, GOP senators need Democrats to overcome a Senate filibuster.
It’s also a big test for Democrats, who have long been deeply divided over the risks and rewards of cryptocurrency trading. Sen. Elizabeth Warren (Mass.) is trying to stop her colleagues from following the lead of Sen. Kirsten Gillibrand (N.Y.), the stablecoin bill’s lead Democratic co-sponsor.
It comes after the crypto industry grew its influence by dumping tens of millions of dollars into congressional races last year.
What went wrong? The nine Senate Democrats — including four who backed an earlier version of the bill in committee in March — blasted changes that Republicans made in the last several days and said the latest proposal would allow stablecoins to pose too many risks to the financial system. Among the Democrats who signed on: Sens. Mark Warner (Va.), Lisa Blunt Rochester (Del.) and Andy Kim (N.J.).
Several Democratic senators raised concerns at a closed-door caucus meeting last Thursday about advancing an industry-backed crypto bill as the Trump family tries to build its own crypto empire. Senate Minority Leader Chuck Schumer (N.Y.) urged Democrats not to commit to supporting the stablecoin bill, saying they should use their leverage to force additional changes to the legislation.
What’s next? GOP aides involved in talks say they were stunned by the Democrats’ statement Saturday but remain hopeful that there is still a path forward. And if the stablecoin legislation clears the Senate in the coming weeks, it would need to be reconciled with a separate but similar bill that is awaiting a floor vote in the House.
Internal GOP tensions could also emerge if House Republicans try to take a bigger swing at crypto by packaging the stablecoin effort with a broader regulatory revamp that would overhaul how the SEC and CFTC police crypto trading. Senate leaders including Banking Chair Tim Scott (R-S.C.) want to notch a win by first passing the stablecoin bill — long seen as the “low-hanging fruit” of crypto policy — and taking up the broader revamp later.
What else we’re watching:
— Big, beautiful bill problems: Speaker Mike Johnson has major policy clashes to resolve this week before House Republicans can move ahead with key committee votes on Trump’s big domestic policy bill, including on Medicaid, food aid and tax. The pressure is on with Senate Republicans watching and poised to scale things back.
— Thune’s EV decision: Senate Majority Leader John Thune needs to make a call on whether to nix a waiver that lets California set stricter car emissions standards rules after the House voted to do so last week. The GAO found that the waiver doesn’t fall under the scope of the Congressional Review Act, and the Senate parliamentarian is backing up that decision. But some GOP senators see a potential path forward in targeting the GAO’s role instead.
— New drug cost bill: Sens. Josh Hawley (R-Mo.) and Peter Welch (D-Vt.) are teaming up on legislation that would bar drug companies in the U.S. from charging higher prices than the international average. The bill is different than the pharmaceutical industry crackdown that the Trump administration is proposing to help finance the GOP budget reconciliation bill, but underscores the bipartisan and populist interest in targeting the drug companies.
Jordain Carney, Meredith Lee Hill, Lisa Kashinsky, Ben Leonard and Mia McCarthy contributed to this report.
