Axios Event: Crypto bill hits major bump amid concerns over guardrails, Trump family ventures

WASHINGTON – In a dramatic turn this week, efforts to enact regulations of digital assets stalled in the Senate just as it was poised to approve the long-awaited legislation.

Why it matters: The bipartisan GENIUS Act was seeing movement after years of calls for federal regulation of the industry.

• Senate Democrats are seeking tougher rules amid reports about crypto dealings by President Trump's family.

Axios' Courtenay Brown and Nathan Bomey spoke with Reps. Ritchie Torres (D-N.Y.) and Bryan Steil (R-Wis.) at the May 6 Axios event, sponsored by Intuit.

What they're saying: "The goal of Congress, or the goal of any legislation, should be to create a regulatory framework that makes it safer, and that's the same mindset that we should apply to crypto," Torres said.

Driving the news: Crypto has been at the center of recent House and Senate debates, with Democrats calling for changes to proposed bipartisan legislation to regulate stablecoins.

• Senate Democrats want changes to the GENIUS Act that address concerns about Trump and his family's profiting from crypto meme coins.
• "I feel strongly that there needs to be language in both the market structure bill and the stablecoin bill that prohibits not only the president, but members of Congress and their families, from personally profiting from stablecoins and meme coins," Torres said.

Flashback: Trump has promised to be the "first crypto president" and says he is "committed to making America the crypto capital."

Steil sponsored the House STABLE Act to put forth a framework for stablecoins "that everybody can abide by," he said.

• "I think there's a need and a hunger to put a regulatory framework in place that will really unlock and allow the broader industry and stablecoins to really grow," he said.
• Steil said a lot of capital might be "sitting on the sidelines" because people are wary of Biden-era policies "driven by enforcement action."

Proponents of crypto say regulating it could help democratize real-time payments and reduce fees, while opponents argue it could legitimize an industry that has attracted some corruptive practices.

• Torres said stablecoin could benefit those in low-income communities who have been "left behind" by legacy financial systems.

• "For them, stablecoin has the potential to be a game-changer, because stablecoin can digitize the dollar, blockchain enables real-time transactions, and the combination of those two technologies … can create a better, cheaper and faster payment system that liberates the lowest income [people] from the long delays and high fees of the traditional financial system."

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In a View From the Top conversation, Penny Lee, president and CEO of the Financial Technology Association, said the U.S. can learn from other countries that have regulated digital payment systems.

• "As the U.S. thinks about the future of finance, regulated payment companies should have access to Fed services, should have access to master accounts, and we're seeing that in the U.K., in Europe, in Singapore," Lee said.
• "All over the world, you have those systems in place, and they're not causing extra risk. What they're doing is allowing these businesses to operate at the highest effectiveness ... without having to pay tolls all along the rails."