Key Notes
- Warren argues the stablecoin bill prioritizes crypto industry profits over consumer protection and public safety.
- The senator compares the legislation to past derivatives deregulation that contributed to the 2008 financial crisis.
- She calls for Congress to close regulatory gaps before the new framework becomes fully operational.
US Senator Elizabeth Warren has raised sharp criticism following the approval of the GENIUS Act, warning that the measure exposes ordinary Americans to new risks tied to the cryptocurrency sector. The GENIUS Act—short for “Guiding and Establishing National Innovation for U.S. Stablecoins”—passed with bipartisan support. However, Warren cautioned that its provisions fall short of protecting consumers and the broader US economy.
Warren, who serves on the Senate Banking Committee, stated in a recent interview that the GENIUS Act allows stablecoin issuers to operate with inadequate oversight. She argued that mandatory requirements in the bill—such as full reserves and monthly audits—do not offset loopholes that industry insiders could exploit.
“While a strong stablecoin bill is the best possible outcome, this weak bill is worse than no bill at all,” Warren said in another recent statement. She alleged that key details in the GENIUS Act were shaped by industry lobbyists seeking lighter regulations for their products.
Warren Warns of Dangerous Loopholes Threatening Consumers
Warren focused much of her criticism on provisions that limit the oversight powers of regulators, particularly the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ). Warren also mentioned that Trump disbanded the crypto enforcement unit of the DOJ and indicated that the SEC would back off on crypto enforcement.
She pointed to the risk of stablecoins being used by foreign investors or for speculative trading without proper barriers in place to shield average consumers from potential losses.
In summary, Warren believes the GENIUS Act will leave the American people on the hook if things go wrong. She continues to highlight the risk that stablecoins could destabilize financial markets or facilitate fraud if not subject to strict federal regulations and oversight.
Senator Links Crypto Bill to Potential Financial Crisis
The senator also flagged potential conflicts of interest among government officials with ties to the digital asset industry. She warned that the bill’s passage reflects growing influence from crypto lobbyists over national policy, leading to regulations that prioritize company profits over public safety.
She mentioned that the crypto industry has written its own legislation. When that happened in the past with the derivatives industry, it led to the 2008 crash, resulting in 10 million Americans losing their homes and jobs.
Warren called on Congress to revisit the GENIUS Act and close what she sees as dangerous loopholes before the new regulatory structure becomes fully operational. She urged voters to maintain pressure on lawmakers, emphasizing that the economic consequences of weak oversight will be felt most by everyday Americans.
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José Rafael Peña Gholam is a cryptocurrency journalist and editor with 9 years of experience in the industry. He wrote at top outlets like CriptoNoticias, BeInCrypto, and CoinDesk. Specializing in Bitcoin, blockchain, and Web3, he creates news, analysis, and educational content for global audiences in both Spanish and English.
