Congress, its eye on a futuristic form of finance, is debating legislation that would legitimize stablecoins, a specific type of cryptocurrency linked to the U.S. dollar.

But lawmakers eager to do the bidding of this new industry are ignoring the transformation of the American regulatory system and allegations of corruption in the second Trump administration.

To the delight of Silicon Valley, Big Tech and Wall Street, within the next week or two the Senate appears poised to approve the GENIUS Act, a law that would give legal blessing to stablecoins. Despite the bitter partisan strife that defines American politics, about a dozen Democratic senators appear ready to lock arms with almost all Republicans to pass the legislation.

Following the model since the New Deal created our modern independent financial regulators, the legislation would allow the Securities and Exchange Commission, the Treasury Department and others to draft the fine print to implement the bill. Their work will really matter, because stablecoins are, unlike cryptocurrencies such as bitcoin, supposed to have real U.S. dollars behind them. Only regulators can ensure that.

Legislation typically provides only a framework for regulatory action. And there was once great logic in Congress giving specialized regulators discretion to use their best judgment.

But we’re living in 2025. The very idea of properly regulating finance, new or old, is under siege by the current administration, rendering the old delegation to agencies all but useless. For generations financial market regulation relied on independent regulators, insulated from economic and political pressures, to protect the integrity of markets for investors without fear or favor.

But President Donald Trump — by undermining agency independence, firing some regulators, browbeating others and appointing sycophants — has ended that era. At the same time, Trump’s deregulatory zealots have rescinded existing safeguards, purged agency staff and abandoned enforcement.

Trump’s men — crypto men — now run the regulators. The SEC head, Paul Atkins, ran a firm with an armada of crypto clients. The president’s nominee for the Commodity Futures Trading Commission, a smaller crypto regulator, is Brian Quintenz, a lobbyist for Andreessen Horowitz, the pro-Trump venture capital firm that is neck-deep in cryptocurrency.

Trump himself is now a crypto kingpin. Selling access to the president via Trump’s memecoin, a collector token, has rightly drawn scathing criticism. But Trump’s family vehicle, World Liberty Financial, has launched a stablecoin that may be vulnerable to foreign grift. A firm backed by the Abu Dhabi government is buying $2 billion worth of the token.

And late last week, the Securities and Exchange Commission dropped a case against Binance, a cryptocurrency exchange that in 2023 admitted it turned a blind eye to money laundering and sanctions violations, days after Binance listed Trump’s stablecoin for trading.

These developments — the warping of independent regulators into docile creatures of industry, the cavalier abandonment of market and investor protection and Trump’s determination to milk the presidency for money — demand a new legislative approach that specifically prescribes the regulatory guardrails necessary to realize the legislative goals. We have crossed a Rubicon, and now lawmakers must assume that regulators will simply acquiesce to industry and political forces.

Today, Congress cannot simply write law as gauzy guidance; it must provide detailed and binding directives that force the regulators to actually do their jobs. Otherwise, the current Trump regulators will never establish the necessary safeguards the Senate envisions because tough measures could threaten not only the crypto industry but also the president’s personal businesses.

So far, Democrats in the Senate have settled for tweaks at a time when wholesale revision is needed. How will customers be protected? How will we thwart crime and money laundering using stablecoins, already a serious problem? Will Big Tech firms get to become banks by issuing stablecoins?

Sen. Adam Schiff, D-Calif., has all but admitted the shortcomings of the legislation, noting that the Republican supporters refuse to allow “reforms to govern how politicians can use these and other digital assets for their own personal profit.” But Schiff intends to vote for the bill, as do Democratic Sens. Kirsten Gillibrand of New York and Angela Alsobrooks of Maryland.

While they’re trying to make laws for the future, their heads are stuck in the past, thinking of the time when regulators could be trusted. For our current era, members of Congress need to make sure cryptocurrency legislation contains clear, binding, prescriptive guardrails to defend the public interest and to fight mounting risk of corruption.

Right now, the stablecoin legislation contains only window dressing. Without a fresh approach, Congress is simply legislating riches for crypto titans — and for Trump.

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Patrick Woodall is the managing director for policy at Americans for Financial Reform.

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