Senator Elizabeth Warren has raised concerns about the GENIUS Act, a bill aimed at regulating stablecoins in the US financial system, as it heads for a final vote today. Warren expressed worries that the bill could potentially allow billionaires to launch stablecoins that monitor user activity, giving them an unfair advantage in the market. She also cautioned that any negative repercussions from such initiatives could lead to taxpayer bailouts.
In her statement on June 16, Warren highlighted a major loophole in the GENIUS Act that could enable Big Tech companies and major retailers to issue their own private currencies structured as stablecoins. She emphasized the need for amendments to address these risks before the bill is passed.
Recent speculation about major retailers like Amazon and Walmart exploring entry into the stablecoin space has added urgency to discussions surrounding the scope and safeguards of the GENIUS Act. However, some market observers have pointed out that Warren’s concerns may not align with the current provisions of the bill.
The GENIUS Act currently prohibits non-financial Big Tech companies from directly issuing stablecoins and imposes stringent regulatory requirements such as full reserve backing, monthly audits, and comprehensive anti-money laundering (AML) compliance. If a company like Amazon were to offer a stablecoin, it would likely need to establish a regulated financial entity or partner with an existing one, subject to oversight from federal bodies like the Fed and the FDIC.
As the GENIUS Act approaches its final vote in the US Senate, scheduled for June 17 at 4:30 P.M., critics like former congressman Justin Amash have voiced opposition, calling it a “backdoor effort to sabotage monetary innovation.” Despite the criticism, industry experts like Nate Geraci believe the bill is likely to pass due to strong bipartisan support and growing political momentum behind the stablecoin industry.
Overall, the GENIUS Act represents a significant step in regulating stablecoins within the US financial system, addressing concerns about potential risks and ensuring transparency and compliance in the emerging digital currency space.