Senators and House allies accelerate legislation amid mounting influence from crypto-backed PACs
At the close of a heated three-hour Senate Banking Committee hearing last month, Senator Ruben Gallego, Democrat of Arizona, took a decisive step. Aligning himself with a bloc of Republican lawmakers, Gallego voted to advance the Genius Act—a measure long championed by the cryptocurrency industry.
“It’s clear that digital assets are here to stay,” Mr Gallego stated after the hearing, diverging from the committee’s leading Democrat and describing the bill as a “step in the right direction.”
Though the vote was preliminary—18 to 6 in favour—it was hailed in crypto circles as a significant victory. The Genius Act still awaits a full Senate vote, but its initial progress signalled a turning point for the digital currency sector, which has been lobbying aggressively for regulatory reform.
Gallego’s support is emblematic of a broader shift on Capitol Hill, where legislators supported by crypto-aligned super political action committees (PACs) are now pushing industry priorities. In Gallego’s tight Senate race last year, crypto-funded PACs pumped $10 million into campaign advertisements highlighting his military background and stance on border control—financial backing that is now bearing legislative fruit.
Across both chambers of Congress, lawmakers aligned with crypto donors are pursuing a dual agenda: enacting the Genius Act to legalise stablecoins—digital assets pegged to the US dollar—and repealing a Biden-era rule mandating tax reporting by crypto firms.
“This is a total sea change in terms of how Congress is approaching this industry,” said Josh Vlasto, spokesman for Fairshake, a super PAC that, alongside two affiliates, invested heavily in pro-crypto candidates. “The spending is already bearing fruit.”
Meanwhile, regulatory headwinds are easing. Under the Trump administration, the Securities and Exchange Commission (SEC) has dropped lawsuits against major platforms like Coinbase and Kraken. Trump himself, a crypto investor, issued an executive order last month directing the creation of a national crypto reserve containing Bitcoin and other assets.
‘A Seat at the Table’
These developments appear to dovetail with Trump’s personal business interests. At a crypto event in March, he endorsed stablecoins as a means to “expand the dominance of the US dollar” and advocated “common-sense” regulations. Shortly after, World Liberty Financial—a firm linked to Trump’s family—announced plans to launch a stablecoin named USD1.
The prospect of the stablecoin bill reaching the Senate floor has sparked concern among Democrats.
“The president of the United States of America should not be using the power of the office to create business that will enrich himself,” said Rep Maxine Waters of California, the leading Democrat on the House Financial Services Committee.
Waters also criticised the influence of crypto money on Congress. “The crypto industry has spent a lot of money, and many of our members are beneficiaries,” she said. “Many of them may not have taken the time to really examine what it is we’re doing.”
Gallego, who was not among the bill’s sponsors, has called for revisions to the Genius Act but defended its core objectives. “Senator Gallego believes it is important to have a seat at the table and work with colleagues on both sides,” his spokesperson Jacques Petit said. “It remains the senator’s priority to ensure proper guardrails are in place.”
Senator Kirsten Gillibrand, a New York Democrat and co-sponsor of the bill, denied that campaign donations played any role. “If you made your decisions on what you’re for based on who’s giving you the most money, you would fail as a member of Congress,” she said.
Crypto’s $130 Million Gambit
Frustrated by years of stalled efforts, crypto leaders doubled down in the 2024 election cycle. Fairshake and its affiliates—Defend American Jobs and Protect Progress—spent over $130 million targeting close congressional races. Funding came from industry giants such as Coinbase, Ripple, and Andreessen Horowitz.
The results were overwhelming: 53 of 58 candidates backed by the PACs won their races. Notably, Defend American Jobs spent $40 million to help Bernie Moreno, a Republican crypto entrepreneur, unseat Senator Sherrod Brown—one of Washington’s fiercest crypto critics. Protect Progress allocated $10 million to support Elissa Slotkin’s Senate campaign in Michigan, while Gallego’s campaign also received a $10 million boost.
Since those victories, industry executives have swarmed Washington, engaging lawmakers and posing for photos on Capitol steps. Their main legislative focus: the Genius Act and future “market structure” bills that could shield digital assets from SEC enforcement.
Lawmakers supported by crypto PACs are now strategically placed. Gallego, Moreno, and Senator Jim Banks of Indiana all serve on the Senate Banking Committee, while Gallego also leads a new subcommittee focused on digital assets.
The Genius Act—short for Guiding and Establishing National Innovation for US Stablecoins—aims to regulate the issuance of stablecoins, which are meant to be backed one-to-one by US dollar reserves. Critics, however, warn that the bill’s safeguards are inadequate.
A coalition of consumer groups has branded the Genius Act “a crypto industry wish list, not an adequate regulatory regime,” citing concerns over potential loopholes and insufficient oversight.
Even crypto proponents have flagged issues. A controversial clause would allow foreign companies to bypass certain regulatory requirements.
Despite the criticism, support for the bill has crossed party lines. When it passed the Senate Banking Committee, it received votes from four Democrats besides Gallego—all unaffiliated with crypto PACs—as well as Moreno, Banks, and 11 other Republicans.
A similar bill, the Stable Act, recently cleared the House Financial Services Committee in a 32–17 vote. The committee’s chair, Rep French Hill, Republican of Arkansas, co-sponsored the legislation and received $100,000 in support from Fairshake.
Influence Translates to Impact
As crypto-aligned lawmakers accelerate industry-backed legislation, the digital asset sector’s investment in US politics is proving powerful. With strategic alliances in place and regulations easing, the industry’s dream of mainstream legitimacy is coming into view—though not without fierce opposition.
