Democrats criticize stablecoin bill as favoring Musk, Big Tech, and crypto enthusiasts
Democrats have concerns about a stablecoin bill that offers limited federal oversight in the expanding sector. However, due to their slim majority in Congress, Republicans can push the bill through along party lines.
During a hearing, Democrats criticized a Republican-led stablecoin bill, known as the Stable Act, as a favor to Elon Musk and “crypto bros” at the expense of retail traders and national security. Representative Maxine Waters, the top Democrat on the House Financial Services Committee, stated that the bill removes barriers that separated banking from commerce, potentially allowing big tech companies like Elon Musk’s X to create their own digital currencies, similar to Facebook’s failed Libra project.
Despite some Democrats softening their stance on cryptocurrency regulation after receiving significant donations from the industry during the 2024 elections, Waters highlighted that there are limits to their support. Representative Stephen Lynch also raised concerns about the bill potentially enabling big tech firms to dominate the stablecoin market under state supervision, creating a regulatory “race to the bottom.”
Bipartisanship
With Republican majorities in both chambers of Congress, they have the power to pass legislation even without Democratic support. President Donald Trump has vowed to bring regulatory clarity to the industry, where he has recently been involved by releasing his own memecoin. Some industry experts believe that bipartisan cooperation is essential to protect the asset class from partisan conflicts in Washington.
Anthony Scaramucci, a hedge fund investor and Bitcoin supporter, argued that Democrats are willing to collaborate with Republicans on well-crafted legislation. Waters expressed disappointment that the current bill was pursued without Democratic input, citing a bipartisan effort with a former GOP committee chair on stablecoin legislation.
Republican lawmakers argued that the bill would strengthen the US dollar’s position as the top reserve currency globally and provide consumers with a more efficient and cost-effective way to move money. They emphasized the high cost of money movement in the US compared to other countries in the G20.
CBDCs
In addition to stablecoins, Republican lawmakers also criticized central bank digital currencies (CBDCs). Last week, a bill was filed to ban CBDCs, which were labeled as an intrusive surveillance tool. Democrats noted that banning CBDCs could hinder the development of a public alternative to stablecoins.
Aleks Gilbert, DL News’ DeFi Correspondent based in New York, can be reached at aleks@dlnews.com.
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