Trump’s crypto czar David Sacks says stablecoin bill is ‘going to pass’

The GENIUS Act, aiming to regulate dollar-pegged digital assets, is progressing through the US Senate with bipartisan support. Following a key procedural vote where 15 Democrats joined Republicans, David Sacks, President Trump’s advisor on crypto and AI, expressed confidence in its passage. He anticipates the bill could unlock trillions of dollars in demand for US Treasuries by legitimizing the over $200 billion currently unregulated stablecoin market. The Senate voted 66-32 to advance the bill.

However, the bill’s progress is not without controversy. Critics raise concerns about potential conflicts of interest due to the Trump family’s involvement with World Liberty Financial, a crypto firm that launched a stablecoin, USD1, backed by US Treasuries and dollar deposits, and received a $2 billion investment from Abu Dhabi’s MGX fund via Binance. Sacks, having previously disclosed the sale of $200 million in crypto holdings, declined to comment on potential family financial benefits from the bill’s passage.

Despite the momentum, final passage remains uncertain. Senator Josh Hawley’s proposed amendment to cap credit card late fees could alienate financial industry allies and jeopardize the bill’s support. Meanwhile, the rise of yield-bearing stablecoins is causing unease within the traditional banking sector.

Professor Austin Campbell highlights the banking industry’s “panic” over these yield-bearing stablecoins, which challenge their profit model based on fractional reserve practices and low returns to depositors. He criticizes the banking lobby’s efforts to stifle competition from interest-paying stablecoins. The SEC’s approval of Figure Markets’ yield-bearing stablecoin in February and Pendle’s report showing a surge to $11 billion in circulation since January 2024 (4.5% of the total stablecoin market) underscore the growing significance of this sector. The interplay between traditional finance and the evolving crypto landscape continues to shape the legislative process surrounding stablecoins.