Trump family complicates crypto legislation
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Donald Trump at a crypto-themed bar in New York in 2024. Photo: Spencer Platt/Getty Images
The Trump family's digital asset ventures are making some Republican lawmakers uneasy about long-awaited, bipartisan crypto legislation.
Why it matters: The White House is boosting stablecoin legislation just as World Liberty Financial, a company tied to the Trump family, is promising to launch such a token.
- Since 2023, the Trump family has lent its name to NFT projects, meme coins, decentralized finance initiatives and, most recently, bitcoin mining.
- Democrats argue it exposes taxpayers to a bailout risk if the stablecoin fails and Trump decides to save it.
Zoom in: Concerns about international crime and scams remain the minority's biggest issue about this legislation, a Democratic aide told Axios.
- But the Trump family moves are a lingering worry.
- "I've had several Democrats approach me about it," Sen. Cynthia Lummis (R-Wyo.), who chairs the new digital assents subcommittee, told Axios. She said the Trump family's crypto investments make it harder to advance a bill on the issue.
- House Democrats pummeled the Trump family and Republicans during a lengthy hearing last week on stablecoin legislation.
The big picture: Stablecoins, blockchain assets designed to have a fixed value so they can be used for payments, have been the killer app of cryptocurrency.
- They generate nice profits for their issuers, who keep the interest generated by the billions of dollars of assets set aside to back the tokens.
- The second-largest stablecoin issuer, U.S.-based Circle, just filed to go public.
What they're saying: GOP senators were unwilling to criticize specific Trump family actions, but some raised concerns about perception.
- "People need to be careful to stay away from anything ... where they may be wading into the gray," said Sen. Thom Tillis (R-N.C.), who also sits on the newly formed digital assets subcommittee.
- Tillis stressed he did not know the details of the Trump family's investment to weigh in specifically.
The other side: Sen. Bernie Moreno (R-Ohio), another committee member, has no issues with the Trump family getting involved in the crypto space.
- He slammed House Speaker Emerita Nancy Pelosi (D-Calif.), saying she has conflicts of interest because of her husband's stock trading.
- The major crypto-linked super PAC, Fairshake, spent more than $40 million to help elect Moreno last year.
Zoom out: The Senate Finance Committee recently passed a bipartisan bill, GENIUS, that would create regulations for stablecoins. Chair Tim Scott (R-S.C.) told Axios at an event that leadership had committed to bringing it to the floor.
- The final legislation is likely to set rules for banks, non-banks and credit unions to issue stablecoins, how to make sure they are super-safe and the degree of state involvement, among other things.
- A similar bill, STABLE, also was just voted to the floor of the House.
- An industry policy pro tells Axios that leadership wants to avoid taking STABLE or GENIUS to conference.
