Crypto Bill Stalls in Senate as Democrats Withdraw Support

WASHINGTON—The U.S. Senate on May 8 failed to advance a bill that would regulate “stablecoins” in the cryptocurrency market, dealing a blow to a bipartisan effort backed widely by the industry. The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, sponsored by Sen. Bill Hagerty (R-Tenn.), was intended to bring about a system of regulations for the market of stablecoins, which are digital tokens whose value is pegged to another asset (e.g., the U.S. dollar, bonds, or securities). Stablecoins are attractive to larger and more risk-averse investors—for example, pension funds, sovereign wealth funds, asset managers, and wealthy family offices—who want to invest in cryptocurrency without the risks of value fluctuation. The bill would require permits for issuing stablecoins, prevent “rehypothecation” of stablecoins by lenders, and delineate the boundaries between state and federal regulators, among other rules....