**Key Points to Remember:**
– Stablecoin regulation remains divided after the Senate rejects the GENIUS Act.
– The U.S. risks losing its crypto leadership without the GENIUS Act, according to the Treasury Secretary.
– Concerns over anti-money laundering (AML) and national security led Democrats to oppose the bill.

Treasury Secretary Scott Bessent voiced his disappointment following the Senate’s 48-49 vote against the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. On X (formerly Twitter), Bessent called the decision a “historic misstep” with far-reaching implications, stressing that the GENIUS Act represented a critical opportunity for the U.S. to lead the global stablecoin sector. “The world needs American leadership,” he stated, pointing out the missed chance to fortify the dollar’s dominance through innovation.

Bessent criticized the allowance of fragmented state-by-state regulation to continue, cautioning that without a unified federal approach, the development of digital assets could shift overseas. Introduced by Senator Bill Hagerty (R-TN) with support from other Republicans, the GENIUS Act aimed to establish a comprehensive regulatory framework for stablecoins in the U.S. Despite initial bipartisan support, the bill faltered on a procedural vote due to sudden withdrawal of support from Senate Democrats, prompted by national security and AML concerns, along with last-minute opposition from key figures.

The failure of the GENIUS Act has cast doubts on the future of stablecoin regulation and broader legislative efforts around digital assets, especially with the 2026 midterms approaching. Senator Cynthia Lummis, a major proponent of the bill, expressed her disappointment on X, stating that not passing the GENIUS Act represents a step back in securing America’s digital future.

The debate around stablecoins, particularly following the TerraUSD collapse, highlights the tensions between centralization and decentralization within the crypto space. While regulation is seen as necessary by some to mitigate risks, others view it as a contradiction to the decentralized nature of cryptocurrencies.

**FAQ Highlights:**
– The GENIUS Act could still be reintroduced or reconsidered after its procedural defeat.
– USD-backed stablecoins are viewed as a tool to reinforce the U.S. dollar’s global dominance.
– Issuing a digital dollar reflects a centralized approach, diverging from blockchain’s decentralization ethos.

“Treasury Secretary Scott Bessent slams Senate’s decision to block the GENIUS Act, warning of lost U.S. leadership in global stablecoin market. #GENIUSAct #StablecoinRegulation #DigitalDollar”