The GENIUS Act has been halted as the U.S. Senate has voted against it during a session on Capitol Hill. The eyes of the crypto industry and the world were on the GENIUS Act, which is a key bill aimed at establishing federal oversight of stablecoins. This is a blow to the crypto industry’s efforts to gain some regulatory clarity.

The effort to put the GENIUS Act into action was missed by a narrow margin. The vote ended in a 48-49 tally, falling short of the 60 votes needed to open a formal debate in the Senate. The legislation was previously cleared with bipartisan support from the Senate Banking Committee. However, it received last-minute pushback from Senate Democrats who had some reservations because of President Donald Trump’s personal gains from the bill.

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Why is the GENIUS Act Halted?

Concerns raised by Democrats include the bill’s perceived lack of safeguards against the potential influence of foreign-issued stablecoins and illegal financial activities. Several of the far-left senators had concerns regarding President Donald Trump’s growing ties to the crypto industry. These concerns also include the crypto-backed fundraising efforts and the launch of his personal memecoin.

Scot Bessent, Treasury Secretary, criticized this outcome with a post on X.com, “The Senate missed an opportunity to provide that leadership today by failing to advance the GENIUS Act… Without it, stablecoins will be subject to a patchwork of state regulations instead of a streamlined federal framework.”

Two Republicans, Senators Josh Hawley and Rand Paul, broke ranks to vote against the bill. Senate Majority Leader John Thune also changed his vote at the last minute, a procedural move that allows the Senate to bring the bill back for reconsideration.

One of the bill’s original supporters, Sen. Ruben Gallego, who received $10 million from pro-crypto PACs this year, called for a temporary pause to revise the legislation and address growing concerns.

Despite the setback, lawmakers on both sides suggested the bill could still move forward with amendments. Sen. Mark Warner emphasized that the legislation is “not yet finished,” while Sen. Cynthia Lummis warned that further delays risk pushing U.S. crypto innovation offshore. Sen. Bill Hagerty, the bill’s lead sponsor, reacted strongly to the vote, saying, “This is a vote to kill the crypto industry here in America.” The debate is expected to resume next week as negotiations continue.