12 February 2026
After days of exciting developments in the crypto space on Capitol Hill, a group of tenacious Democratic senators finally appear open to compromise on stablecoin legislation. While the outcome is far from certain, the signs are positive.
On Wednesday, a handful of pro-crypto Democratic senators, including Ruben Gallego (D-AZ), Mark Warner (D-VA) and Angela Alsobrooks (D-MD), met with their Republican colleagues to discuss terms that could regain their support for the GENIUS Act, which would establish a framework for stablecoin offerings in the United States, according to sources with knowledge of the meeting.
Until last Saturday, Democrats had supported the bill. But that evening, nine senators, including Gallego, Warner and Alsobrooks, withdrew their support, saying the latest draft did not meet their expectations.
This sudden withdrawal appears to have been caused by a mix of factors. Sources say there was discontent that Democrats were not involved in the drafting of the final version of the bill. Growing frustration over the alleged conflict of interest of former President Donald Trump with crypto, also caused dissatisfaction in the party.
Trump is currently involved in several crypto projects, including a meme coin called TRUMP that is currently worth over $10 billion, and a DeFi project called World Liberty Financial that raised over $550 million in a public token sale and recently issued its own dollar-based stablecoin.
After the Democrats’ withdrawal, Republicans, caught off guard, responded with a strong backlash. On Tuesday, Senate Majority Leader John Thune (R-SD) filed a motion for the GENIUS Act, with the intention of voting on Thursday to give the bill final consideration.
Thune stated that if Democrats fail to regain support for the bill, they would demonstrate that legislation surrounding digital assets and crypto is a purely Republican affair.
Stablecoins are digital assets that are typically pegged to the dollar and allow their users to conduct crypto transactions and transfer funds abroad without having direct access to dollars. These assets are the backbone of the crypto economy and are essential to the functioning of the market.
Crypto industry observers expect that once stablecoin legislation passes both the House and Senate, and is eventually signed by Trump, Wall Street and the big banks will finally feel safe enough to enter the market, potentially bringing in billions, if not trillions, of new dollars.
Tensions around crypto legislation reached a fever pitch on Tuesday. That morning, House Democrats walked out of a hearing on digital assets in protest of “Trump’s crypto corruption.” Behind the scenes, crypto policy leaders worried that the political balance in Washington was stacked against them. If Republicans table a GENIUS Act and it fails to get 60 votes, it could deal a fatal blow to the momentum for crypto legislation, according to multiple crypto insiders.
Fortunately, a sort of truce between the two sides appears to have been reached this afternoon—at least for now. Opponents Gallego, Warner, and Alsobrooks met for nearly four hours with Thune and pro-crypto Republican Senators Bill Hagerty (R-TN) and Cynthia Lummis (R-WY). Sen. Kirsten Gillibrand (D-NY), who has not yet withdrawn her support for the GENIUS Act, was also in attendance.
By the end of the meeting, “progress had been made,” according to a source familiar with the discussions. Now, Senate staffers are busy turning the verbal agreements between the parties into formal bills. Whether the relationships between Democratic and Republican staffers are strong enough to get the bill through to a vote tomorrow, however, is unclear.
There are breathless rumblings about the Democratic effort to delay the vote until next week, but it’s uncertain whether Republicans will allow it. Meanwhile, there’s an unspoken tension: If Republicans bring the bill to a vote and it fails to get more than 60 votes due to lack of Democratic support, crypto super PACs could choose to back the GOP in the 2026 midterms.
It remains unclear what concessions Republicans made to Democrats to win them over to support the GENIUS Act. In his statement on Saturday, Gallego cited topics such as “anti-money laundering, foreign issuers, and national security” as areas that need improvement in the bill. Crypto lobbyists interpreted the comments as an indication that Democrats want stronger provisions preventing Tether’s USDT token from being traded on secondary markets, and language targeting DeFi projects seen as threats to U.S. foreign policy.
For now, however, industry experts have no idea what the new language will look like. They may not find out until after the Senate floor vote tomorrow. “I’m having a mini heart attack,” said one crypto policy leader.
What are stablecoins and why are they important?
Stablecoins are digital assets pegged to the dollar. They are crucial to the crypto economy, as they allow users to easily make crypto transactions and send money abroad.
Why haven't some Democrats been more supportive?
Democrats withdrew their support because the latest version of the bill did not meet their expectations and they were not involved in its drafting.
What are the expected consequences if the legislation is approved?
It is expected that after the stablecoin legislation is passed, Wall Street and major banks will finally feel safe enough to enter the crypto market, potentially bringing in billions of new investments.
Bitcoin (BTC)
Ethereum (ETH)
XRP (XRP)
