- Warren warns GENIUS ACT may allow tech firms to bypass controls
- Bill mandates audits, reserve backing, and anti-laundering rules
- Bipartisan support keeps GENIUS ACT on track for Senate passage
Today, senators are set to vote on the GENIUS ACT amid increased scrutiny on their proposed stablecoin regulations. The bill has continued to draw bipartisan support despite new warnings from critics about possible regulatory loopholes. As the momentum mounts in the Senate, government and the industry stakeholders prepare for major changes in the regulation of digital currencies.
Senator Warns Over Loopholes in GENIUS Act
Senator Elizabeth Warren expressed new fears about the bill’s structure and cautioned that there could be backdoor access of large companies. She warned that big tech could exploit the law and issue stablecoins through affiliated parties. These fears come after the recent reports that major retailers are associated with early-stage stablecoin projects.
The critics have claimed that although the GENIUS ACT will not allow Big Tech to directly issue stablecoins, there are still enforcement gaps. Warren cautioned that companies would bypass the prohibitions by establishing financial subsidiaries. She also pointed to the risk of exposing the taxpayers in case of future market failures.
According to the bill’s proponents, it addresses the risks through stringent compliance regulations and federal surveillance mechanisms. The bill contains reserve requirements and requires monthly third-party audits of the stablecoin issuers. Also, it mandates all participants to register with federal agencies and adhere to anti-money laundering procedures.
The supporters claim that the bill’s legal framework would still pose major challenges to non-financial corporations. Any effort to enter the sector through partnerships must adhere to the same regulatory standards. The FDIC and Federal Reserve oversight would also reduce possible exploitation of the system.
GENIUS Act Balances Innovation and Consumer Protection
The industry experts have expressed satisfaction over the bill’s efforts to balance between innovation and consumer protection. They noted that the law allows stablecoin development but sets legal limits for corporate participation. The institutional protection and compliance costs could discourage entry of unqualified firms in the market.
However, the GENIUS ACT still draws bipartisan support despite criticism. Lawmakers on major senate committees insist that the bill provides a comprehensive regulatory framework to digital assets. They claim that stablecoins should be regulated to guarantee the long term integrity of the market.
Concerns Over Centralized Control Over Digital Finance
Former Congressman Justin Amash opposed the bill, claiming it increases federal control over digital money systems. However, analysts believe the checks and balances in the bill are supposed to stop the overreach. They argue that the bill limits federal intervention and increases transparency in the market.
The Senate cloakroom reported the vote is set at 4:30 P.M. and will advance to the house in case it passes. If the bill passes, it could become a major milestone in the U.S. financial policy on digital currencies. The stakeholders expect the legislation to define the next phase of stablecoin integration in the financial system.
Analysts predict a favorable vote outcome based on the current political momentum as well as bipartisan support. If enacted, the GENIUS ACT could be a central framework in stablecoins operations in the United States. Senate leaders believe that the bill is important to protect consumers and ensure a stable market.