At the end of last month's three-hour hearing, Sen. Reuben Gallego, a Democrat from Arizona, sided with a group of Republicans amid a heavily contested debate. He voted to advance the Genius Act, a bill backed by the cryptocurrency industry.
“It's clear that digital assets will remain here,” Gallego said after a Senate Banking Committee hearing. Breaking past the top Democrats on the committee, he called the bill “a step in the right direction.”
The 18-6 votes were preliminary and advanced a bill that required approval from the Senate as a whole. But in the crypto world, it was celebrated as a moment of proof.
Gallego is part of the Congress's increasingly influential cohort. He is a large beneficiary of the crypto industry. In last year's tight Senate race, he supported $10 million from Super PACS, funded by three large crypto companies, including the Coinbase Digital Currency Exchange. Money funded an ad that encouraged Gallego's military service and support for border enforcement.
Now, he and dozens of other lawmakers supported by Super PACS are taking steps to advance crypto priorities in Congress, passing the industry a series of long-awaited victories with an extensive history of fraud and volatility.
In the Senate, these lawmakers are throwing support behind the Genius Act, which will open up a way for businesses to issue Stablecoins, a digital currency designed to maintain a dollar price. Also in both rooms, they voted to abolish Biden-era rules that require crypto companies to report certain tax information to the Internal Revenue Service.
It's rare that an industry spends millions of dollars to influence Congress. However, Crypto's political machinery stands out for its scale and speed of outcomes.
The industry responded with joy. The spending is already “bearing fruit,” said Josh Vrust, a spokesman for Fairshake. “This is a complete ocean change in terms of how Congress is approaching the industry.”
Just as US regulators roll back long-standing enforcement campaigns, cryptography is progressing. Since President Trump took office, the Securities and Exchange Commission has dropped lawsuits against major crypto companies such as Coinbase and Kraken, lifting legal clouds in the industry. Crypto's own investor, Trump signed an executive order last month calling for the creation of a National Crypto Reserve. This is a government stockpile that includes Bitcoin and other digital currencies.
The stable law is poised to benefit Trump's business interests. At the Crypto Conference in March, he said Stablecoins would “expand control of the US dollar” and called for “common sense” law. A few days later, World Liberty Financial, the crypto company his family helped start, announced that it would start selling Stablecoin, called USD1.
Stablecoin Bill was able to go to the Senate floor for votes in the coming weeks. It could lead to the vigilance of some Democrats who claim Congress is giving industry and Trump exactly what they want.
The crypto industry “expends a lot of money, and many of its members are beneficiaries,” said California president Maxine Waters, a top Democrat on the House Financial Services Committee. “A lot of them may not have taken the time to really look into what we're doing.”
Gallego said he is not a sponsor of the act of genius and needs fine tuning. (The full name is the guidelines and establishment of national innovation for the US Stablecoins Act.) However, he also defends the bill, saying it includes consumer protection.
“Senator Gallego believes it's important to sit at the table and work with colleagues on both sides,” his spokesman Jack Petit said in a statement. “Make sure you have the right guardrails in place is a priority for Senators.”
In an interview, Sen. Kirsten Gillibrand, a New York Democrat who co-sponsored the Genius Law, said crypto spending would not affect the law.
“If you make a decision about what you're doing based on who's giving you the most money, you'll fail as a member of Congress,” said Gillibrand, who is not funded by Crypto Super PACS.
During the Biden administration, the industry hired expensive lobbyists and pushed federal law without much progress. The 2024 campaign was a turning point.
A group of crypto executives and political strategists formed two related super PACs with Fairshakes, defending American jobs, defending progress and spent more than $130 million to influencing congressional races around the country. The spending is primarily Coinbase, Digital Currency Business Ripple, and venture capital firm Andreesen Horowitz, which funds more than 100 crypto startups.
The candidates supported by Super PACS won 53 out of 58 races. In Ohio, American employment spent $40 million to support Republican crypto entrepreneur Bernie Moreno, Democrat chair of the Banking Committee and fundless crypto critic Sen. Sherrod Brown. Protect Progress spent $10 million to help Democrat Elissa Slotkin win a Michigan Senate seat. And another $10 million from Super PACS has supported Gallego, who has spoken positively about cryptography in the past.
The industry has since aimed to convert these election victory into law. Executives from companies such as Coinbase, Ripple and Binance, a huge exchange that resolved criminal charges with the US government in 2023, have descended to Washington to meet lawmakers and take photos on the stairs of the US Capitol.
Their top priority is the bill that lays out the rules for stablecoins. The second is the “market structure” law that prevents most cryptocurrencies from being subject to SEC enforcement lawsuits, which oppressed them during the Biden era.
Many lawmakers supported by the Crypto Super PACS are located to advance those objectives. Sen. Jim Banks, an Indiana Republican with support from Moreno, Gallego and PACS, serves on the Senate Banking Committee. Gallego is also the highest ranked Democrat on the new Senate subcommittee dedicated to codes.
The draft Crypto Market Structure Bill is still underway. But a group of senators, including Senator Tim Scott, a Republican South Carolina who chairs the Banking Committee, introduced the Genius Act in February.
In some ways, companies that issue stubcoins are similar to banks. The coin is to be supported by assets the issuer holds in the reserve. If a company sells a million stables, they must have $1 million in their safe so that customers can redeem the coins at any time.
However, for many years, crypto companies have been scrutinized for failing to maintain adequate reserves. At the same time, stubcoins have become a useful tool for criminals seeking to move their money across borders.
In theory, the Genius Act addresses these issues by outlining the rules for Stablecoin publishers. However, in February there is a coalition of consumer groups called “the crypto industry wish list, not a proper regulatory regime.” They argued that the bill's requirements were too loose and poses a huge risk to customers.
Even some cryptography enthusiasts have expressed their reservations. The provisions of the Genius Act allow overseas companies to avoid some of their requirements.
When the bill advanced from the Senate Banking Committee, four other Democrats other than Gallego, who had no support from Fairshake, voted along with Moreno, Banks and 11 Republicans, as well as 11 Democrats who were not supported by CryptoPACS.
A similar bill, a stable law, was introduced in the House last month, urging Democrats to raise concerns that the new rules could benefit Trump's cryptocurrency.
“The President of the United States should not use the power of the office to create a business that enriches himself,” Waters said in an interview.
However, after the marathon hearing on April 3, the House Financial Services Committee voted between 32 and 17 votes to move the bill into the full room.
The committee chairs the Arkansas Republican representative of France Hill. A longtime crypto advocate, co-sponsor of the Stubcoin bill and beneficiary of $100,000 on fairshake spending.
