At the end of three hours of listening last month, Senator Ruben Gallego, a Democrat in Arizona, looked like a team of Republicans in a strongly disputed debate. It was passed to promote Genius Law, a bill supported by the encryption industry.
“It is clear that digital assets are here to stay,” Mr Gallego said after the hearing of the Senate Banking Committee. Breaking the committee’s top democrat, he called the bill a “step in the right direction”.
Voting, 18 to 6, was only a preliminary, promoting a bill that would require approval from the full Senate. But in the cryptographic world, it was celebrated as a moment of justification.
Mr Gallego is part of an increasingly influence of cojogeos: the beneficiaries of the generosity of the encryption industry. During a tight struggle of the Senate last year, he helped $ 10 million from the Super Pac funded by three major encryption companies, including the exchange of Coinbase digital currencies. Advertisements funded by money promoted Mr Gallego’s military service and border support support.
Now and dozens of other legislators supported by the Super Pac, are taking measures in Congress to promote encryption priorities, providing a series of long -awaited wins in an industry with extensive history of fraud and instability.
In the Senate, these legislators threw support behind the genius law, which will pave the way for businesses to issue Stablecoins, a digital currency designed to maintain a $ 1 price. Revenue.
An industrial cost of millions of dollars to affect Congress is almost unusual. But Crypto’s political machine has stood out for the scale of its expenditure – and the speed of results.
The industry responded with joy. Expenditure is already “fruits”, said Josh Vlasto, a spokesman for Fairshake, a super PAC who worked with two connected PACs to support Congress candidates. “This is a total change in the sea in terms of how Congress is approaching this industry.”
Encryption legislation is proceeding just as US regulatory authorities are transferring an enforcement campaign. From the inauguration of President Trump, the Securities and Exchange Commission filed lawsuits against large encryption companies such as Coinbase and Kraken, lifting a legal cloud in the industry. An investor in Crypto itself, Mr Trump signed an executive order last month demanding the creation of a national reserve encryption – a government stock containing bitcoin and other digital coins.
Stablecoin legislation is ready to benefit Mr Trump’s business interests. At a encryption conference in March, he said Stablecoins would “extend the US dollar” and demanded “common sense” legislation. A few days later, the World Liberty Financial, the encryption company helped by his family, announced that he would start selling a stablecoin called USD1.
The Stablecoin bill could go to the Senate floor for a vote in the coming weeks – to the alert of some democrats who argue that Congress gives the industry and Mr Trump exactly what they want.
The encryption industry “has spent a lot of money and many of our members are beneficiaries,” said California’s Maxine Waters spokesman, the leading Democrat in the House Financial Services Committee. “Many of them may not have taken the time to really consider what we were doing.”
Mr Gallego was not a sponsor of the genius law and said he demanded perfection. (The full name is the guidance and establishment of national innovation for US laws Stablecoins.) But it has also defended the bill, saying it includes protection for consumers.
“Senator Gallego believes that it is important to have a place on the table and work with colleagues on both sides,” said Jacques Petit, his spokesman. “The senator’s priority remains to ensure that there are appropriate protective messages.”
In an interview, Senator Kirsten Gillibrand, a Democrat of New York, who was a co-author of the genius law, said cryptographic costs had no effect on law.
“If you made your decisions about what you are about who gives you the most money, you would fail as a member of Congress,” said Ms Gillibrand, who was not funded by the Crypto Super Pacs.
During the Biden administration, the industry hired expensive interest groups to promote federal legislation, without making much progress. The 2024 campaign was a turning point.
A group of encryption executives and political strategies formed Fairshake and two connected Super Pacs, defend US jobs and protecting progress, which spent more than $ 130 million to influence strict Congress tribes across the country. Expenditure was mainly funded by Coinbase, Ripple Digital Currency and Business Capital Company Andreessen Horowitz, which has funded more than 100 cryptographic companies.
Candidates supported by Super Pacs won 53 of 58 matches. In Ohio, the defense of US jobs spent $ 40 million to support Bernie Moreno, a Republican encryption businessman who excluded Senator Sherrod Brown, the Democratic Chairman of the Banking Committee and a sincere cryptographic critic. Protect Progress spent $ 10 million to help Elissa Slotkin, Democrat, to win a Senate headquarters in Michigan. And another $ 10 million from Super Pacs reinforced Mr Gallego, who had spoken favorably about Crypto in the past.
Since then the industry has begun to turn these electoral victories into legislation. Executives in businesses such as Coinbase, Ripple and Binance, a gigantic exchange that resolved criminal charges with the US government in 2023, went down to Washington, met with legislators and posted photos of the US Capitol.
Their first priority is the account that sets rules for Stablecoins. The second is the legislation on the structure of the market that would ensure that most cryptocurrencies are not subject to lawsuits for the enforcement of the Capital Market Committee, which have been suppressed during the Biden years.
Many legislators supported by Crypto Super Pac are positioned to promote these goals. Mr Moreno, Mr Gallego and Senator Jim Banks, a Republican of Indiana, who was backed by PAC, serve in the Senate Banking Committee. Mr Gallego is also the highest democrat in a new Senate Subcommittee dedicated to Crypto.
A draft of the encryption structure bill is still in the projects. However, a group of senators, including Senator Tim Scott, the Republican of South Carolina, who chairs the banking committee, introduced the Genius law in February.
In some ways, companies that issue Stablecoins are similar to banks. The coins are supposed to be supported by assets that the publisher holds in a reserve: If a business sells a million stablecoins, it should have $ 1 million in a treasury somewhere so that customers can redeem the coins at any time.
But over the years, encryption companies have been examined to keep sufficient reserves. At the same time, Stablecoins have become a useful tool for criminals who want to move money to the border.
Theoretically, Genius Law addresses these problems by describing the rules for Stablecoin publishers. But in February, a coalition of consumer groups called the bill “a list of encryption desires, not an adequate regulatory regime”. They claimed that the requirements of the bill were very relaxed and would create significant dangers for customers.
Even some encryption lovers have expressed reservations. A provision in the genius law would allow overseas companies to pass some of its requirements.
When the bill went by the Senate Banking Committee, four Democrats, except Mr Gallego, none of whom received support from Fairshake, also voted for it, along with Mr Moreno, Mr Banks and 11 Republicans who were not supported by Crypto Pac.
A similar bill, the stable law, was introduced into the body last month, urging the Democrats to raise concerns that the new rules could benefit Mr Trump’s encryption operation.
“The President of the United States of America should not use the office of the office to create businesses that will enrich himself,” Ms Waters said in an interview.
But after a marathon hearing on April 3, the House Financial Services Committee voted 32 to 17 to move the bill to the full chamber.
The chairman of this committee is a representative of France, a Republican of Arkansas-a long-term encryption supporter, a co-authored of the Stablecoin bill and the beneficiary of $ 100,000 in expenditure from the fairshakes.
