David Sacks, US President Donald Trumps top adviser on crypto and artificial intelligence, said the administration expects the stablecoin bill to clear the Senate with bipartisan backing.We have every expectation now that its going to pass, Sacks told CNBC on May 21, following a key procedural vote that saw 15 Democrats join Republicans to clear the filibuster threshold.The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act is the most advanced federal effort yet to establish a legal framework for dollar-pegged digital assets.Sacks said the bill could trigger trillions of dollars in demand for US Treasurys by unlocking stablecoin growth under clear rules.We already have over $200 billion in stablecoins its just unregulated, he added.
If we provide legal clarity, we create enormous demand for Treasurys practically overnight.Related: GENIUS Act legitimizes stablecoins for global institutional adoptionStablecoin bill moves forward despite Trump controversyThe stablecoin bills progress comes despite controversy surrounding the Trump familys crypto dealings.
Critics have raised concerns that the administration benefits from the legislation, given its ties to World Liberty Financial, a crypto firm backed by Trump family members that recently launched a stablecoin, USD1.The US Senate voted 6632 to advance debate on the GENIUS stablecoin bill.
Source:US SenateThe token is backed by US Treasurys and dollar deposits and has received a $2 billion investment commitment from Abu Dhabis MGX fund via Binance.Sacks, who disclosed the sale of $200 million in crypto-related holdings before joining the White House, declined to comment on whether the president or his family may financially gain from the bills passage.Despite momentum, final passage is not guaranteed.
Senator Josh Hawley has added a controversial provision to the bill that would cap credit card late fees, a move that could cost the legislation support from financial industry allies.Related: Hong Kong passes stablecoin bill, set to open licensing by year-endBanks panicking over yield-bearing stablecoinsIn a May 21 post titled The Empire Lobbies Back, New York University professor Austin Campbell said the US banking industry is panicking over the rise of yield-bearing stablecoins, which threaten their profit model.An excerpt of Campbells X post.
Source:Austin CampbellCampbell criticized the banking lobby for pressuring lawmakers to defend their interests and block competition from interest-paying stablecoins.He argued that banks rely on fractional reserve practices to profit while offering low returns to depositors, and fear stablecoins may expose and disrupt that system.Asreported by Cointelegraph, the US Securities and Exchange Commission in February approved the first yield-bearing stablecoin security by Figure Markets.According to a May 21 report from Pendle, yield-bearing stablecoins have soared to $11 billion in circulation since January 2024, representing 4.5% of the total stablecoin market.Magazine: TradFi is building Ethereum L2s to tokenize trillions in RWAs: Inside story