The cryptocurrency industry in the United States wants regulatory clarity around its on-chain financial markets and digital assets like stablecoins.

It is having a lot of trouble getting there.

The industry’s hopes for a productive policy discussion around a draft bill for digital asset markets were derailed Tuesday (May 6). With news that the GENIUS Act, an acronym for Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 Act, is being rushed to a floor vote Thursday (May 8) amid growing partisan discord, the initially bipartisan outlook for domestically issued stablecoins could also potentially be scuttled.

“Other major economies around the world are years ahead in putting clear rules in place for stablecoins and centralized intermediaries,” Kraken Global Head of Policy and Government Relations Jonathan Jachym said in a statement. “After many years of legislative progress, it is critical that U.S. lawmakers come together in the coming months to finalize stablecoin and market structure bills by August.”

Internationally, jurisdictions like the European Union have already implemented comprehensive crypto regulations, such as the Markets in Crypto-Assets Regulation (MiCA), which came into effect in December. The U.S. has been under pressure to establish its own regulatory structures to maintain competitiveness in the global digital asset market.

The move by Senate Majority Leader John Thune of South Dakota to schedule a procedural vote for the GENIUS Act Thursday could signal openness to negotiations to address the objections raised by Democratic senators. Discussions are underway to potentially incorporate amendments that would enhance consumer protections and national security measures within the bill.

Read also: The Three Most Important US Crypto Policies to Watch This Year

The Implications of the GENIUS Act of 2025

Despite its bipartisan origins, the GENIUS Act has encountered political headwinds. A faction of Senate Democrats, led by Sens. Elizabeth Warren of Massachusetts and Mark Warner of Virginia, have raised concerns over potential conflicts of interest, particularly in light of President Donald Trump’s family’s involvement in the crypto industry. The launch of a stablecoin by Trump’s World Liberty Financial and a substantial investment deal with a foreign entity have intensified scrutiny, with critics arguing that the legislation could inadvertently benefit Trump’s personal financial interests.

As their concerns come to a head, Senate Democrats introduced Tuesday the End Crypto Corruption Act, aiming to prohibit federal officials and their families from investing in or endorsing digital assets.

For its part, the proposed GENIUS Act stablecoin legislation lays out a comprehensive set of standards for the issuance, backing and operation of payment stablecoins, digital assets pegged to the value of fiat currency and used primarily for transactions. While the bill’s proponents tout its potential to strengthen consumer protection and financial stability, critics argue that it could centralize control, limit competition and stifle innovation in a sector known for its dynamism.

Stablecoin issuers under the GENIUS Act will be expected to meet rigorous operational standards, including maintaining sufficient capital and liquidity buffers, implementing robust risk management systems, and complying fully with the Bank Secrecy Act (BSA), including anti-money laundering (AML) and sanctions obligations.

Issuers would be required to submit monthly reserve reports certified by their CEOs and chief financial officers and audited annually by a registered public accounting firm. These measures aim to reinforce market trust following high-profile collapses of algorithmic stablecoins and undercollateralized issuers.

“For the largest banks, this is probably quite good,” former assistant secretary of the treasury Amias Gerety told PYMNTS in March. “I think the largest banks will succeed as stablecoin issuers.”

However, he cautioned that community banks would struggle to compete with potential stablecoin issuers like Apple or Meta.

See also: Keeping Stablecoins Stable is Complicated: Why CFOs Need to Pay Attention

A Comprehensive Framework for Payment Stablecoins

Per the proposed bill, stablecoin issuers must obtain licenses, with oversight determined by their size. Entities with assets under $10 billion would be regulated at the state level, while larger issuers would fall under federal supervision.

“Even if stablecoins are the preferred medium for a lot of criminal activity, creating a regulated environment where these companies can operate in conjunction with law enforcement is probably a positive,” Dan Boyle, partner at Boies Schiller Flexner, told PYMNTS in April.

As U.S. stablecoin regulation moves forward in fits and starts, the marketplace is continuing a markedly upward trajectory. Stablecoin infrastructure platform BVNK received an investment from Visa Tuesday. In April, stablecoin market capitalization reached an all-time high amid strong performance across crypto sectors.