Democrats Assail Trump's Crypto Ventures at Marathon Congressional Hearing

They said the Republicans' stablecoin bill in the House of Representatives would be a massive giveaway to the president

Democrats slammed one of President Donald Trump’s crypto ventures as they assailed a bill setting guidelines for so-called payment stablecoins at a marathon Congressional hearing on Wednesday.

The House Financial Services Committee members advanced the Stable Act with six Democrats voting in favour, according to Punchbowl News.

The bill, which now heads to the House floor, would require issuers to seek federal or state approval, back any stablecoins 1:1 with highly liquid assets such as cash, US Treasury bills, or bank deposits, and take measures to limit money laundering, sanctions evasion, and other financial crime. It would also forbid issuers from paying yield on payment stablecoins and create a two-year moratorium on so-called endogenously collateralized stablecoins.

The Trump administration has been rolling out a vast regulatory agenda this year, including a crackdown on illicit fentanyl and a new strategy to counter China. It’s also focused on modernizing financial regulations, which has included setting guidelines for cryptocurrencies.

The administration asked Congress to pass two landmark bills by year’s end: the stablecoin bill and a so-called market structure bill addressing the regulatory status of most other cryptocurrencies.

Lawmakers are moving quickly. A companion bill in the Senate, the Genius Act, was recently advanced from that chamber’s banking committee. It’s unclear how the two bills would be consolidated if they both win approval. Crypto supporters are hopeful Trump can sign something into law before the August recess.

But members of the House Financial Services Committee sparred for 10 hours over the bill on Wednesday, largely focusing on the Trump family’s burgeoning crypto empire.

The president’s son, Donald Trump Jr, recently announced plans to launch his own DeFi project, World Liberty Financial, which would mint a USD1 stablecoin. The Trump family is also planning to start a Bitcoin (BTC) mining business in partnership with an unnamed company.

Those ventures complicate lawmakers’ work to pass the bill, especially given the administration’s work on relaxing regulations for the industry, said French Hill, the committee chair and a Republican from Arkansas.

“I attempted to speak to the chair last week, and what I really desired was that we could reach an agreement to not pass a bill that would legitimize what is essentially blatant greed and corruption,” said Maxine Waters, the ranking Democrat on the committee. “But unfortunately, the chair was not interested in hearing my perspective.”

The California Democrat’s comments came just two days after Hill told reporters the Trump family’s crypto ventures “made our work more complicated.”

The focus on the Trump family’s ventures is a new front. In recent debates, Democrats such as Senator Elizabeth Warren have focused on other bad actors who use stablecoins such as Tether’s USDT, including terrorists and fentanyl traffickers. They also criticised the bills as handouts to Elon Musk and “crypto bros.”

The administration is also working on a bill that would adjust regulations for so-called atomisable or memecoins such as Trump Jr’s project.

The Trump administration is quickly approaching a pivotal moment in its efforts to regulate cryptocurrencies. As the administration navigates this uncharted territory, it faces pressure from both sides of the aisle to strike a balance between innovation and investor protection.

The administration is working with Congress to pass legislation that would create a federal framework for stablecoins, which are cryptocurrencies pegged to the value of a fiat currency, such as the US dollar.

The administration is also engaging with regulators to coordinate their approach to crypto regulation, and it is working on a strategy to mitigate the risks posed by illicit actors in the crypto space.

The administration is also planning to host a summit on digital assets later this year, which would bring together government and industry leaders to discuss the opportunities and challenges presented by cryptocurrencies and other digital assets.

The administration’s actions come as Congress is also working on legislation to regulate cryptocurrencies. The Senate Banking Committee recently approved the bipartisan bill, which would create a regulatory framework for most types of cryptocurrencies. The House Financial Services Committee is also working on its own version of the bill.

The administration’s efforts to regulate cryptocurrencies are part of a broader effort to modernize the financial system and adapt to new technologies. The administration is also working on legislation to reform the federal antitrust laws and to create a new agency to regulate artificial intelligence.