Democratic Senator and leading member of the Senate Banking Committee Elizabeth Warren sent a letter to Treasury Secretary Scott Bessent criticizing the GENIUS Act. The legislation, signed by Donald Trump in July, established baseline rules for issuing and circulating stablecoins in the United States.
According to Warren, the act represents “a soft regulatory regime for crypto banks” and fails to provide sufficient safeguards for consumers and taxpayers.
“The Treasury must implement and enforce this law in a way that minimizes risks to financial stability, consumers, and national security,” she wrote in the letter.
Key Concerns About the Law
The GENIUS Act requires that stablecoins be fully backed by U.S. dollars or other liquid assets, and that issuers with a market capitalization above $50 B undergo annual audits.
The law also introduces certain provisions for foreign issuers. However, as Warren noted, it “leaves many gaps” in regulation and needs further refinement.
In her letter, the senator urged the Treasury to use upcoming bipartisan discussions on a new cryptocurrency bill to fix the weaknesses of the GENIUS Act and establish clear rules for the entire digital asset industry.
According to journalist Eleanor Terrett, the discussions involving representatives of major crypto firms will take place in the Senate on October 22 – first among Democrats, then among Republicans.
Concerns About Trump’s Influence
One of the main points of criticism is a potential conflict of interest involving Donald Trump’s family and its ties to the cryptocurrency business. The issue centers on the USD1 stablecoin, which is managed by entities associated with Trump’s inner circle.
According to Henley & Partner, the number of crypto millionaires has grown by 40% over the past year, reaching approximately 242,000. The majority of this wealth is held in Bitcoin.
Experts attribute the surge to policy shifts under the Trump administration, with Trump himself reportedly expanding his personal fortune through such projects. The family’s crypto-related income is estimated at around $5B.
According to Bankrate, USD1 is already among the largest stablecoins in the world.
“The Treasury must propose concrete steps to address the corruption risks embedded in the GENIUS Act and explain how the new framework will be protected from conflicts of interest,” Warren emphasized.
Read Also:
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- White House Expects Crypto Market Bill to Pass by End of 2025
- GENIUS Act Pushes EU Toward Digital Euro – FT
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