At the end of a three -hour audition last month, Senator Ruben Gallego, Democrat of Arizona, took sides of a group of Republicans in a highly contested debate. He voted to advance the Genius Act, a bill supported by the cryptocurrency industry.
“It is clear that digital activities are here to stay,” said Gallego after the hearing of the Senate Banking Committee. By breaking from the best democrat of the Committee, he defined the bill a “step in the right direction”.
The vote, from 18 to 6, was only preliminary, advancing a bill that will require the approval of the entire Senate. But in the world of cryptocurrencies, it was celebrated as a moment of claim.
Gallego is part of an increasingly influential cohort to the congress: beneficiaries of the size of the cryptocurrency industry. During a narrow race of the Senate last year, it was helped by $ 10 million by Super Pacs financed by three large cryptocurrency companies, including the exchange of coinbase digital currencies. The announcements financed by the money that promoted Mr. Gallego’s military service and support for the application of borders.
Now he and dozens of other legislators supported by the Super Pacs are taking measures to the congress to advance the priorities of cryptocurrencies, delivering a series of much expected victories in a sector with a vast history of fraud and volatility.
In the Senate, these legislators have launched support behind the Genius Act, which would open the way to companies to issue Stablecoins, a digital currency designed to maintain a price of $ 1. And in both rooms, they voted to repeal a rule of the biden era that required cryptocurrencies companies to report certain tax information to the service of internal revenue.
A sector that spends millions of dollars to influence the congress is almost unusual. But Crypto’s political machine distinguished himself for the scale of his expense and the speed of the results.
The industry responded with joy. The expense is already “bringing fruits”, said Josh Vlasto, Fairshake spokesperson, a Super Pac who worked with two affiliated CAPs in support of the candidates for the Pro-Crypto congress. “This is a total sea change in terms of how the congress is approaching this sector.”
The legislation of cryptocurrencies is proceeding precisely while the US regulators return a campaign of years. Since the inauguration of President Trump, the Securities and Exchange Commission has dropped legal actions against the main cryptocurrency companies such as Coinbase and Kraken, raising a legal cloud in the sector. An investor in Crypto himself, Trump signed an executive order last month asking for the creation of a national cryptocurrency reserve, a government supply containing bitcoin and other digital currencies.
Stablecoin’s legislation is ready to benefit from Trump’s commercial interests. In a cryptocurrency conference in March, he said that Stablecoins would “expand the domain of the US dollar” and asked for “common sense” legislation. A few days later, World Liberty Financial, the cryptographic business that his family helped to start, announced that he would start selling a Stablecoin called USD1.
Stablecoin’s bill could go to the Senate for one vote in the coming weeks – with the alarm of some democrats who claim that the congress is giving the industry and Mr. Trump exactly what they want.
The cryptocurrency industry has “spent a lot of money and many of our members are beneficiaries”, said the representative Maxine Waters of California, the democratic maximum of the Chamber’s financial services committee. “Many of them may not have had time to really examine what we are doing.”
Gallego was not a sponsor of the Genius Act and said that it requires improvement. (The full name is the guide and creation of national innovation for the United States Stablecoins Act.) But also defended the account, stating that it includes protections for consumers.
“Senator Gallego believes that it is important to have a place at the table and work with colleagues of both sides,” said Jacques Petit, his spokesperson, in a note. “The senator’s priority remains to ensure that adequate guardrails are underway.”
In an interview, Senator Kirsten Gillibrand, a New York Democrat who was Co-Sponsor of the Genius Act, said that encryption expense did not have any impact on legislation.
“If I made your decisions about what you are based on who you are giving you the most money, you would fail as a member of the congress,” said Mrs. Gillibrand, who has not been financed by the Crypto Super Pacs.
During the Biden administration, the industry took expensive lobbyists to push for federal legislation, without making a lot of progress. The 2024 campaign was a turning point.
A group of cryptocurrency managers and political strategists formed Fairshake and two affiliates, defend American work and protect progress, which have spent over 130 million dollars to influence close congress breeds across the country. The expense was funded mainly by Coinbase, The Digital Currency Business Ripple and the Risk Capital Society Andreessen Horowitz, which financed more than 100 crypt-ups.
The candidates supported by the Super Pacs won 53 out of 58 races. In Ohio, the defense of American works spent $ 40 million to support Bernie Moreno, a republican cryptocurrency entrepreneur who did not insert Senator Sherrod Brown, the democratic president of the bank committee and a frank cryptographic. Protect progress has spent $ 10 million to help Elissa Slotkin, a democratic, win a seat in the Senate in Michigan. And other $ 10 million from the Super Pacs have increased Mr. Gallego, who in the past had spoken favorably on the crypt.
Since then the industry has decided to convert those electoral victories in legislation. The managers of companies such as Coinbase, Ripple and Binance, a giant exchange that resolved criminal accusations with the United States government in 2023, went down to Washington, meeting the legislators and posing for photographs on the steps of the United States Capitol.
Their first priority is the account that establishes the rules for Stablecoin. The second is the legislation of the “market structure” that would guarantee most of the cryptocurrencies are not subject to the legal causes of the century, which have led a repression during biden years.
Many legislators supported by the Crypto Super Pacs are positioned to advance these objectives. Moreno, Mr. Gallego and Senator Jim Banks, an Indiana Republican who was supported by the Pacs, was part of the Senate’s bank committee. Gallego is also the highest rank Democrat on a new subcommittee of the Senate dedicated to the crypt.
A draft of the bill on the structure of the cryptocurrency market is still in progress. But a group of senators, including Senator Tim Scott, the South Carolina Republican who presides over the banking committee, introduced the Genius Act in February.
In a sense, companies that emit Stablecoin are similar to banks. Coins should be supported by activities that the issuer holds in reserve: if a company sells a million Stablecoin, it should have $ 1 million in a caveau somewhere so that customers can redeem the coins at any time.
But over the years, the cryptocurrency companies have been examined for not having maintained sufficient reservations. At the same time, Stablecoins have become a useful tool for criminals who wish to move money through the borders.
In theory, the genius act addresses these problems by outlining the rules for Stablecoin broadcasters. But in February, a coalition of consumer groups defined the bill “a list of wishes of the cryptocurrency industry, not an adequate regulatory regime”. They argued that the requirements of the bill were too loose and would have created serious risks for customers.
Some cryptocurrency fans have also expressed reservations. A provision in the genius act would allow overseas companies to circumvent some of its requirements.
When the bill came out of the Senate Banking Committee, four Democrats other than Gallego, none of whom received Fairshake’s support, also voted for this, together with Mr. Moreno, Mr. Banks and 11 Republicans who were not supported by Crypto Pacs.
A similar bill, The Stable Act, was introduced to the Chamber last month, pushing the Democrats to raise concerns for the fact that the new rules could benefit from the encryption activity of Mr. Trump.
“The president of the United States of America should not use the power of the office to create business that will be enriched themselves,” said Mrs. Waters in an interview.
But after an audition of Marathon on April 3, the Chamber’s financial services committee voted from 32 to 17 to move the bill throughout the room.
The president of that Committee is the representative French Hill, a republican of the ARKANSAS-UN supporter of the long-standing cryptocurrency, co-sponsor of the Stablecoin bill and $ 100,000 beneficiary in Fairshake expenditure.