Senate leaders are working to lock down support for bipartisan cryptocurrency legislation as Republicans begin to complain about last-minute changes being negotiated with the Democrats.
Sen. Cynthia Lummis (R-WY), one of the leading advocates of a Senate bill regulating digital coins, met with Minority Leader Chuck Schumer (D-NY) on Tuesday after a bloc of crypto-friendly Democrats announced surprise opposition to the legislation.
Separately, Senate GOP leaders briefed Republicans on the bill at a Tuesday conference lunch, asking members to air out concerns ahead of a pivotal test vote.
So far, the bulk of the opposition to the legislation — which would set rules for stablecoins, cryptocurrencies that have a value tied to an underlying asset, such as gold or fiat currency — has come from Democrats wanting to add language addressing money laundering, foreign issuers, and risks to the U.S. financial system.
A group of nine Democrats, four of whom supported the legislation in committee, released a statement on Saturday promising to vote against the bill without “additional improvements.”
Complicating matters, Republicans will also have to deal with possible defections in their own ranks. On Tuesday, Sen. John Kennedy (R-LA), a member of the Banking Committee, told the Washington Examiner he is a “no” until he can find out what sort of concessions have been offered to the Democrats.
Kennedy supported the crypto bill in a March committee vote.
“I want to know what deals are being made,” he said. “I know what came out of committee, but I think they’re making a lot of deals back and forth. And I’m not going to vote for a bill if I don’t understand what’s in it.”
The complaints raise serious doubts about whether the legislation, the first-ever regulatory framework for stablecoins, has the votes to pass when the Senate holds a procedural vote on Thursday, a dramatic turnaround from where the bill stood only days ago.
Its GOP sponsors, including Lummis and Sen. Bill Hagerty (R-TN), have spent months negotiating language to shore up the Democratic support needed for a bipartisan vote, only to get pulled in the opposite direction by skittish Republicans.
Sen. Josh Hawley (R-MO), one of the undecided Republicans, told the Washington Examiner he was speaking with the bill sponsors about his concerns over Big Tech. Others were inclined to oppose the bill from the start, including libertarian Sen. Rand Paul (R-KY).
“I’m glad we’re not voting until Thursday, because it gives me a chance to have some discussions in-house to find out where the votes are and satisfy people that this is a good mix between consumer protection and clear regulatory environment that protects the U.S. economy,” said Lummis.
Hagerty, the lead Republican sponsor, predicted the Senate would be able to resolve all outstanding complaints before lawmakers leave town on Thursday.
“We’re very, very close to having everything concluded, and I expect to have it concluded by the end of the week,” he said.
Until then, both sides have injected a degree of gamesmanship into the final round of talks, with Senate Majority Leader John Thune (R-SD) pledging to hold a vote this week in spite of the Democratic opposition.
On Tuesday, he told reporters the new demands were steering negotiations in the wrong direction.
“I guess my question is, when will the Democrats take ‘yes’ for an answer? If they have other suggestions and things they want incorporated into the draft, we are certainly welcome to taking a look at and working with them on that, but we need to start moving forward,” Thune said.
Schumer was more circumspect, telling reporters only that negotiations were ongoing. He is under pressure from his caucus to take a more aggressive stance on President Donald Trump, whose family is heavily invested in cryptocurrency.
“Right now, Democrats and Republicans are talking to each other about the bill,” he said at a press conference.
Schumer also touted legislation with Sen. Jeff Merkley (D-OR) on Tuesday banning the president and lawmakers from benefitting financially from cryptocurrency.
Lummis acknowledged the Trump family’s investments were an impediment to negotiations. Last week, a United Arab Emirates-backed fund agreed to use the Trump stablecoin “USD1” for a $2 billion transaction, stoking allegations that the president is using his office for financial gain.
But she maintained that Democrats writ large were proposing changes in good faith, with talks focused on the “substance of the bill.”
“I can’t let my mind go there and even attribute or let thoughts of bad faith creep in,” she said, noting that Sen. Kirsten Gillibrand (D-NY), the lead Democratic sponsor, has been trying to get stablecoin legislation passed for years.
Sen. John Barrasso (R-WY), the chief Republican vote-counter in the Senate, downplayed concerns on the GOP side, telling reporters that his party is aligned on the bill.
“That’s what I heard at lunch today,” he said. “The question was from both Sen. Lummis as well as Sen. Hagerty: ‘If there’s anybody that has any concerns or questions, let us know.’ There was none.”
With the vote subject to the filibuster, Republicans will need support from at least 60 senators to begin debate and eventually consider amendments on the floor.
THUNE TO PLOW AHEAD WITH STABLECOIN BILL DESPITE DEMOCRATIC OPPOSITION
Paul, for his part, said GOP leadership had not reached out to win his support. His “misgivings” center on whether a regulatory framework is even necessary and concern that existing crypto companies will be able to box out competition with the legislation.
“For a lot of reasons I’m skeptical of it,” he told the Washington Examiner.