Senator Elizabeth Warren continues her crusade against cryptocurrencies. A well-known critic of digital assets does not give up on the GENIUS Act (Guiding and Establishing Innovation for US Stablecoins Act), which came into force in the summer with Donald Trump’s signature. In his letter to Treasury Secretary Scott Bessent, he does not mince his words – he calls the act “light regulation for cryptobanks” and demands urgent action. It also hits Trump!
Conflict of interest with a presidential stamp – Warren thunders
Democrats’ biggest headache? Trump’s involvement in the cryptocurrency industry. World Liberty Financial USD (stablecoin run by the president’s family) has become one of the largest in the world. Warren makes it clear: Treasury must propose concrete steps against corruption and explain how it has safeguarded policies against conflicts of interest.
This is a glaring problem that cannot be ignored as Congress sets rules for the entire cryptocurrency market
– we read in Warren’s letter.
GENIUS with gaps the size of the Grand Canyon
The GENIUS Act requires stablecoins to be fully backed by USD or similarly liquid assets, imposes annual audits on issuers with capitalization above $50 billion, and establishes guidelines for foreign issuances. Sounds solid? Warren sees it differently.
The senator was supported by Federal Reserve Governor Michael Barr, who said last week that the bill leaves “several regulatory loopholes” and called on banking agencies and states to act together.
When USD 3 trillion is created “by accident”
Warren’s most explicit argument is the recent Paxos mishap – the company accidentally minted PYUSD tokens worth USD 3 trillion (which I wrote about on our website). They explained that it was a “technical problem”, but for the senator it is proof that operational errors can threaten not only the issuer, but the stability of the entire financial system.
The Treasury Department must explain publicly how it intends to address these threats – or what authority it needs from Congress to do so
– sums up Warren.
Democrats and Republicans are meeting with cryptocurrency industry representatives today to talk about broader regulation. Warren makes it clear: GENIUS is just the beginning, and the real fight against cryptocurrencies is just beginning.
