(Bloomberg) – The crypto industry is appearing in Washington, and it’s not just Donald Trump.
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With key Democrats allies rising, the industry has demonstrated its political power by wiping out longtime adversaries with a flood of campaign money.
Crypto-friendly Stubcoin laws are poised to pass the Senate after years of industry Capitol Hill Agenda Landing. The outlook for other priorities has also been improved.
New York Democratic Sen. Kirsten Gillibrand, a longtime supporter of the crypto industry, rose to her party’s leadership rank and moved on to election fundraising. She has had her growing impact behind efforts to abolish tax reporting rules on digital assets and pass a friendly Stablecoin regulatory bill.
Support for the New York Democrats is crucial, said Wyoming’s Cynthia Ramis, a leading Senate Republican code advocate and regular partner at Gillibrand. A powerless Democrat can still hamper legislation in the Senate, where most bills require 60 votes.
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“Without her, that wouldn’t happen,” Ramis said. Gillibrand builds on financial issues, representing the importance of bipartisan alliances in the Wall Street home state and Senate.
Gillibrand’s cross-party relationship extends to Republican Banking Committee Chairman Tim Scott. Tim Scott is also being tapped by his party to lead fundraisers for upcoming elections. The two have personal friendships and attend weekly prayer luncheons together. Her partnership with Lummis at Crypto included a Community Fundraising Committee in 2022.
Gillibrand argues that, like the progressive senator that Sen. Elizabeth Warren seeks, should cultivate the emerging crypto industry rather than driving offshore through the burden of the other kinds of her party. Still, she adds that some degree of regulation is essential.
“If we don’t do anything, if this industry is left to its own devices, we’ll do more disruptions. There’s more fraud in Sambankmanfried,” Gillibrand said in an interview with the Senate office.
Under Trump, who accepted Crypto and issued his own Memecoin, federal regulators have backed off lawsuits against crypto companies. But his stance will only guide enforcement as long as he stays in the White House.
Crypto can only lock down durable legal changes with Congressional approval. The Senate will need important assistance from both parties to overcome procedural obstacles.
Crypto’s new influence was fully on display last week when five Senate Democrats on the Banking Committee ignored an apocalyptic warning from Warren, the top Democrat on the panel, and supported an industry-responsible law regulating privately issued Stablecoins nailed to the US dollar.
It was a sudden shift from past years when Crypto’s skeptical Sherrod Brown, then the Democratic chairman of the Banking Committee, blocked actions sponsored by the industry-friendly bill Gillibrand. Brown also got in the way of Bankmanfried’s previous efforts, boosted by his massive campaign contributions.
In the meantime, Crypto Titans has invested funds in two affiliated entities, Fairshake PAC, the most funded corporate political action committee in US history. They dedicated $40 million to defeating Brown in the November election and replacing it with Republican Bernie Moreno, a blockchain entrepreneur and crypto enthusiast. Industry PACs have supported over millions of freshmen, democratic senators, like Crypto-friendly Arizona’s Ruben Gallego, with each OpenSecrets data.
With the new parliament beginning, Crypto’s financial strength in next year’s midterm elections was clear. In January, Fairshake announced that PAC and its affiliates had already accumulated a $116 million Warchest.
Moreno and Gallego are currently on the Banking Committee and helped send the Stubcoin bill to the Senate floor. There, they could potentially win the 60 votes needed with the support of the Gilibrand.
Consumer advocates warn that the industry’s financial strength is overwhelming the need to protect users of digital assets from fraud and protect the broader financial system from cascade failure.
“Money is talking very loud,” said Jeff Hauser, executive director of progressive watchdog group Revolving Door Project. Democrats were “shocked” since Crypto flooded the campaign last year. He added.
However, Gillibrand dismisses the idea that Crypto advocates that it will affect Senators’ votes.
“Don’t mind because of political donations. “I don’t think the senators will respond well to being threatened.”
Warren and other critics are seeking a stronger backstop to protect consumers and the financial system from major stubcoin failures.
Meanwhile, Gillibrand said her laws are trying to ensure that Stablecoins are truly stable, with one-to-one reserve requirements with surveillance at the state or federal level, and that the Federal Reserve also plays a role. To prevent inventory from running, reserves must be highly liquid assets such as short-term government liabilities and similar equipment.
Mainstream players such as Visa, PayPal Holdings Inc. and Stripe Inc. are investing in projects involving Stablecoins.
After 15 years as a securities lawyer, Gilibrand pitches stublines to his Senate colleagues, similar to the checks of travelers used to carry gift cards overseas or department stores.
“It’s not intended to be a bank account, it’s not intended to be an FDIC insurance,” she said. “It’s a payment system.”
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