US Senate Democrats are getting flak after they helped move stablecoin legislation ahead for discussion on the Senate floor.

On May 19, 16 Democratic senators broke from the party line to pass a motion to invoke cloture, which will now set the bill up for debate on the Senate floor. Some of the same Democrats had held up the bill in early May when they withdrew support, citing corruption concerns over President Donald Trump’s cryptocurrency dealings.

The bill’s opponents hailed lawmakers’ refusal to support it but were soon taken aback when the senators reversed their position. The lightly amended legislation contained no provisions regarding World Liberty Financial, the Trump family’s crypto venture.

Some activists have said that the Democrats supporting the bill should be ousted in the upcoming Democratic primaries in 2026, reflecting a growing rift in the Democratic Party over cryptocurrencies.

Democratic lawmakers’ approach to crypto shows split in party

On May 19, moderate Democratic Senator Mark Warner announced he would support the bill, stating that it was “not perfect, but it’s far better than the status quo.”

Warner set corruption concerns aside, stating, “Many senators, myself included, have very real concerns about the Trump family’s use of crypto technologies to evade oversight […] But we cannot allow that corruption to blind us to the broader reality: blockchain technology is here to stay.”

Warner concluded it would be better for the US to move forward on imperfect stablecoin legislation than to fall behind other jurisdictions. 

Democratic Senator Kirsten Gillibrand, one of the bill’s sponsors, also pushed aside Trump corruption concerns, saying they should be addressed separately. 

Related: US Senate moves forward with GENIUS stablecoin bill

“A lot of what President Trump is engaged in is already illegal,” she said, adding that she didn’t want the president’s scandals to “distract us from the important goal of having a clear regulatory structure in the United States that can onshore this industry.”

During the vote, progressive Democrats disagreed. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee and a vocal critic of the crypto industry, reportedly got into a heated argument with Gillibrand on the Senate floor.

Warren argued on the Senate floor ahead of the vote, “A bill that turbocharges the stablecoin market, while facilitating the President’s corruption and undermining national security, financial stability, and consumer protection is worse than no bill at all.”

Democrats opposing the bill aren’t giving up either. Senator Michael Bennet of Colorado, who voted against the GENIUS Act, immediately introduced another bill, jokingly named “the STABLE GENIUS Act,” combining the names of the bills in the Senate and House of Representatives.

The bill would prevent the president, vice-president and members of Congress from “issuing or endorsing digital assets” and require them to place any assets they hold in a blind trust while in office.

While the bill has little chance of passing — numerous acts that would limit members’ of Congress financial activities have fizzled out — it shows the Democrats are split on how they should provide opposition.

Democratic activists lambast Democratic GENIUS supporters

The progressive and activist wings of the Democratic party have roundly criticized Congressional leadership for compromising with Republicans on measures that, they claim, should be deal breakers. 

In March, activists were enraged when Senator Chuck Schumer, a Democrat from New York and minority leader in the Senate, voted with the Republicans on a continuing resolution for government funding. One progressive observer accused him of giving up leverage and weakening the Democratic position. 

Then, in April, disagreements over how Democrats should fight Trump’s mass deportations further deepened the rift. 

Now, crypto has become another wedge between the activist wing, which provides crucial voter activation during elections, and centrists in Congress.

Ezra Levin, co-founder and co-executive director of progressive activist organization Indivisible, wrote on BlueSky:

Communications strategist Murshed Zaheed, who formally worked for the offices of Senator Harry Reid and Representative Louise Slaughter, urged people to call their senators to come out against the bill.

“Any Democrat who votes for this today — should never be taken seriously again if they send out emails, text and do videos […] talking a big game about Trump’s corruption,” he said.

Related: What to expect at Trump’s memecoin dinner

Chris Kluwe, a former American football player who has since become a prominent activist within Democratic politics, said on May 20 he was “excited to get a chance to speak at the CA state Dem convention on May 31st, I’m sure [the bill] won’t come up at all in the 4 minutes I’ve been allotted.”

On BlueSky, labor researcher and media law historian Peter Labuza posted “Primary List” in reply to a post of the 16 Democratic senators who helped support the bill.

The subject of primary elections, the intra-party elections to decide who will represent the party in a given district, has also grown contentious.

On May 12, the Democratic National Convention (DNC) voted to void the results of an internal party vote nominating David Hogg as a vice chair. The decision essentially strips Hogg of his title at the DNC and, with it, the ability to promote his controversial policy of sponsoring progressive challengers in Democratic primary elections. 

Hogg had planned to spend $20 million to support progressive and young candidates in Democratic Party primaries as part of the “Leaders We Deserve” campaign — an activist group that aims to elevate younger leaders with a more combative tone against the Trump administration. 

With the stablecoin bills in the House and Senate poised to move ahead, the Democrats seem ill-suited to mount an effective opposition to the bills. Internal struggles and interests within Congress have disunited lawmakers, while activists want a new crop of congresspeople to represent them next term.

In the Democratic Party’s internal battle between the anti-crypto progressive wing and the pro-crypto pragmatists, the latter is winning out, so far. 

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Robinhood submitted a 42-page proposal to the US Securities and Exchange Commission (SEC), calling for a national framework to regulate tokenized real-world assets (RWAs).

The brokerage is seeking to modernize financial infrastructure by making tokenized assets legally equivalent to their traditional counterparts and enabling compliant onchain settlement, Forbes reported on May 20.

In the proposal, Robinhood also revealed plans for creating the Real World Asset Exchange (RRE), a trading platform offering offchain trade matching and onchain settlement for efficiency and transparency.

Robinhood is advocating for uniform federal standards to replace the patchwork of state-level securities regulations that currently apply. The platform would also integrate Know Your Customer (KYC) and Anti-Money Laundering (AML) tools through partners like Jumio and Chainalysis to meet global compliance expectations.

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Robinhood asks for token-asset equivalence

A key feature of the proposal is the push for token-asset equivalence. Under Robinhood’s plan, a token representing a US Treasury bond, for instance, would be treated as the bond itself, not a derivative or synthetic product.

That would allow institutions and broker-dealers to handle tokenized RWAs within the existing regulatory system, potentially streamlining custody, trading and settlement processes.

Technically, RRE would be built on a dual-chain architecture utilizing Solana and Base, according to an overview of the proposal by Franklin Elevator. The system is designed to combine high-frequency offchain trade matching with onchain settlement.

Franklin Elevator said Robinhood projects the platform will achieve sub-10 microsecond matching latency and throughput of up to 30,000 transactions per second.

This could compress the US capital markets’ standard settlement time from T+2 to T+0, cutting trading costs by an estimated 30% annually.

“RWA tokenization represents a new paradigm for institutional asset allocation. Robinhood is committed to leading this trend under a compliant framework,” Robinhood CEO Vlad Tenev said.

Cointelegraph reached out to Robinhood for comment, but they hadn’t responded by publication time.

Related: SEC Chair: Blockchain ‘holds promise’ of new kinds of market activity

Tokenization gains momentum

Robinhood’s proposal comes amid a renewed wave of interest in RWA tokenization, with major players from both traditional finance and crypto making headlines last week.

On April 30, BlackRock filed to create a blockchain-based share class for its $150 billion Treasury Trust Fund, allowing a digital ledger to mirror investor ownership. On the same day, Libre revealed plans to tokenize $500 million in Telegram debt via its new Telegram Bond Fund.

On May 1, MultiBank Group inked a $3 billion tokenization deal with UAE real estate firm MAG and blockchain provider Mavryk.

“The recent surge isn’t arbitrary. It’s happening because everything’s lining up,” Eric Piscini, CEO of Hashgraph, told Cointelegraph. “Rules are getting clearer in major markets. The tech is stronger, faster, and ready to scale. And big players are actually doing it,” he added.

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Cryptocurrency exchange Kraken announced the launch of regulated derivatives trading on its platform under the European Union’s Markets in Financial Instruments Directive (MiFID II).

According to a May 20 announcement, Kraken’s perpetual and fixed maturity crypto futures contracts will be available for trading by retail and institutional customers in the European Economic Area (EEA). The announcement follows the exchange acquiring an MiFID license in early February through the acquisition of a Cypriot investment firm, approved by the Cyprus Securities and Exchange Commission.

Kraken’s head of exchange, Shannon Kurtas, said, “Europe is one of the fastest-growing regions for digital asset trading and investment, with some of the most sophisticated and demanding clients and institutions.”

He added, “Clients and partners increasingly seek comprehensive offerings within a regulated framework.”

Kraken had not responded to Cointelegraph’s request for comment by publication.

Release the Kraken

Kurtas said that following the deployment of the new derivatives products, “they [users] can seamlessly trade futures as part of a full suite of products” on the platform.

Derivatives, he said, will improve “capital efficiency, access to liquidity, reliability and enable sophisticated strategies and position management.” Kraken’s derivatives will be offered through a Cyprus-based MiFID II-regulated entity, Payward Europe Digital Solutions.

The launch follows Kraken completing its acquisition of the futures trading platform NinjaTrader earlier this month, as its first quarter revenue jumped 19% year-on-year to $471.7 million.

Crypto derivatives see lots of activity

Recently, Coinbase CEO Brian Armstrong said his firm will continue to look for merger and acquisition opportunities, after acquiring crypto derivatives platform Deribit. The comments came after the publicly listed US crypto exchange earlier this month agreed to acquire Deribit, one of the world’s biggest crypto derivatives trading platforms.

Major crypto exchange Gemini has also recently received regulatory approval to expand crypto derivatives trading across Europe. Gemini’s head of Europe, Mark Jennings, said in a May 9 statement:

“Once we commence business activities, we will be able to offer regulated derivatives throughout the EU and EEA [European Economic Area] under MiFID II.”

Decentralized finance platform Synthetix also plans to venture further into crypto derivatives with plans to re-acquire the crypto options platform Derive. The transaction is subject to approval from both the Synthetix and Derive communities.

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