Republican Missouri Sen. Josh Hawley broke with his party Thursday to oppose the GENIUS Act, a cryptocurrency bill that would require banks to prioritize stablecoin investors over regular depositors during financial collapses.
The senator’s opposition throws a wrench into what appeared to be smooth sailing for the crypto industry’s top legislative priority. The bill would establish a regulatory framework for stablecoins while including buried language mandating that cryptocurrency investors get first dibs on remaining funds when banks run dry.
“It’s a huge giveaway to Big Tech,” Hawley told The New York Times. “It allows these tech companies to issue stablecoins without any kind of controls. I don’t see why we would do that.”
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Georgetown Law professor Adam Levitin warns the setup creates a direct pipeline from FDIC-insured deposits to uninsured cryptocurrency investments.
“Congress is about to put the claims of stablecoin investors ahead of Ma and Pa’s bank deposits,” Levitin told The Lever. “In other words, the GENIUS Act is subsidizing stablecoin issuance on the back of bank deposits.”
The senator’s frustration has grown as negotiators “gutted” key parts of his proposed amendment designed to limit Big Tech’s crypto ambitions. Hawley originally sought stronger guardrails against tech giants issuing digital currencies, but told the Times the final compromise amounts to “essentially window dressing.”
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His concerns center on companies like Meta and potentially Elon Musk’s X platform gaining power to create their own money with minimal oversight. Some Democrats worry the bill’s structure could potentially benefit Musk, whose X Money crypto token recently entered beta testing for payments on his social media platform.
The crypto industry has spent heavily to secure passage, with companies and trade groups shelling out at least $4 million in lobbying since January.
Other Republicans including Kentucky Sen. Rand Paul and Louisiana Sen. John Kennedy have also expressed skepticism, though most of the GOP conference still supports the bill. Democrats remain deeply split, with Massachusetts Sen. Elizabeth Warren opposing the measure while New York Sen. Kirsten Gillibrand cosponsored it.
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The Daily Caller News Foundation reached out to Hawley, Warren, Gillibrand and Kennedy’s offices but did not hear back by the time of publication. The bill’s author, Republican Tennessee Sen. Bill Hagerty, likewise didn’t respond to a request for comment — nor did its sponsors, Senators Tim Scott, Cynthia Lummis and Angela Alsobrooks.
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First published by the Daily Caller News Foundation.
