Opposition by some Democrats to a new stablecoin being launched by the Trump family's crypto business could hold up legislation aimed at regulating the digital assets industry.
World Liberty Financial, a cryptocurrency venture that President Donald Trump helped launch last year, announced Tuesday that it plans to launch USD1, a stablecoin pegged at a 1-to-1 ratio to the U.S. dollar.
Republican lawmakers in the House and Senate have introduced stablecoin bills. Democrat support, though, will be needed to pass the legislation.
"It [USD1] shouldn't make life harder, but it might," said Sen. Cynthia Lummis, R-Wyo., Politico reported.
The legislation, which has received bipartisan support, would become the first major crypto reform ever passed by Congress. At least three House Democrats have said they support the bill, Politico reported.
Rep. Maxine Waters, D-Calif., ranking member of the Financial Services panel and ardent Trump critic, is expected to oppose the legislation at a committee vote this week unless it includes language that would block Trump and Elon Musk from issuing stablecoins, Politico reported.
A spokesperson for House Financial Services Republicans issued a statement saying the panel "looks forward to continuing our work" on stablecoins.
"If we want clear standards in this market, the status quo is not the answer," spokesperson Brooke Nethercott said. "Several members on both sides of the aisle have been working to provide clear regulatory guidelines to allow payment stablecoins to flourish in the United States."
Other Democrat lawmakers involved in crypto talks said the Trump stablecoin announcement could hurt legislative efforts.
"I can't think of anything quite so damaging to bipartisanship than that happening," said Rep. Jim Himes, D-Conn., a senior Democrat on the House Financial Services Committee, Politico reported.
In the Senate, five Democrats called on leadership at regulatory agencies to consider the potential conflicts of interest from the Trump stablecoin.
Sen. Elizabeth Warren, D-Mass., ranking member of the Senate Banking, Housing, and Urban Affairs Committee, and four other Democrats sent a letter to the Office of the Comptroller of the Currency and the Federal Reserve to express concerns and asking how OCC and the Fed the intended to regulate World Liberty Financial and its stablecoin.
Zach Witkoff and his father, Trump's special diplomatic envoy Steve Witkoff, helped launch World Liberty Financial with Trump and his sons last year.
The Associated Press contributed to this story.
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Charlie McCarthy, a writer/editor at Newsmax, has nearly 40 years of experience covering news, sports, and politics.
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