On Thursday, a bipartisan bill on Stablecoins was approved by the U.S. Senate Banking Committee and was established to reach Senate votes in a few weeks. However, critics argue that the law can open the door to “crypto abuse” and corporate overreach.
The Genius Act (aka the Guidelines and Establishment of National Innovation for the US Stablecoins Act) aims to provide the country’s first federal regulations for Stablecoins. The Stablecoin industry has grown to a $228 billion market.
“We are pleased to announce that Jeremy Allaire, CEO of the company that publishes USDC Stablecoin,” said:
But the bill also said “if the Genius Act becomes law, it will increase price manipulation, coin barriers and the use of cryptocurrency in illegal finance,” said Bartlett Naylor, a monetary policy advocate for the DC-based Watchdog Group Public Citizens.
Specifically, the group has issued warnings about how the law will allow large companies like Walmart, Meta and X to penetrate the US banking sector. The Genius Act does not have a provision under the Bank Holdings Corporations Act, which prohibits major commercial companies such as Amazon, Walmart, Twitter/X, and/or Facebook/Meta from participating in banking operations under the Bank Holdings Corporations Act. ”
Massachusetts Sen. Elizabeth Warren reiterated these concerns, and recently warned that the bill “may clear the deck for Elon to issue X money as his own stubcoin, without guardrails to protect consumers, national security and financial stability.”
But proponents of genius law claim it marks a turning point for the payments industry.
“We’re excited to announce that we’re a great opportunity to see the company’s cryptocurrency department,” said Peter Merton, director of the New York Financial Services Cryptody. “They are becoming a central component of global payments.”
“We can expect that in the near future, all banks will adopt a Stablecoin strategy, whether or not all banks are prepared,” Marton says.