At a time when the cryptocurrency industry is on the verge of its first major legal victory, the debate over stablecoin regulation in the US Congress is intensifying.
But recent developments regarding the GENIUS bill have been overshadowed by harsh criticism from Democratic senators.
Democrats on the Senate Banking Committee have released a highly critical analysis of the final version of the GENIUS bill ahead of a crucial vote tonight, crypto journalist Eleanor Terrett reports for Fox Business.
The committee staff report accused the bill of paving the way for “Trump crypto corruption” and risking giving digital currencies a stranglehold on Big Tech. Democrats called for additional amendments to address outstanding issues with the bill.
The main points criticized by Democrats were:
- There is no provision preventing Trump from profiting from his own stablecoin.
- Paving the way for the X platform, owned by Elon Musk, to issue a stablecoin called “X Money”.
- It widens loopholes for existing stablecoins like Tether, which could benefit terrorists or criminals.
- Contains serious deficiencies in consumer protection and financial security measures.
The GENIUS bill, which the Senate plans to vote on today, includes significant regulations for stablecoin issuers. According to the bill, stablecoins would have to be backed by fully liquid and secure assets, such as treasury bonds. It would also require compliance with anti-money laundering and anti-terrorist financing rules and ensure that investors are considered priority creditors in the event of a potential bankruptcy.
The bill will advance with the approval of 60 senators. Although it was expected to pass easily with bipartisan support at the beginning of the month, the latest regulations appear to have caused concern among some Democrats. Names such as Senator Elizabeth Warren and Representative Maxine Waters are cautious about the impact of the crypto sector.
*This is not investment advice.
