Elizabeth Warren Warns of Risks of Stablecoin Law
Date: 2025-07-28 Author: Henry Casey Categories: CRYPTO PAYMENTS
Warren compared the law, known as GENIUS, to the Commodity Futures Modernization Act of 2000, which she believes contributed to the 2008 financial crisis due to the lack of regulation of over-the-counter derivatives. According to her, the new initiative creates a false sense of security around stablecoins pegged to the US dollar, especially when they are issued by large companies. People begin to believe that all such tokens are equally reliable, which, according to the senator, is wrong.
“In the crypto industry, laws are often written by market participants themselves, which sooner or later ends in serious problems. "To create a truly effective regulatory system, it is necessary to act competently and independently," Warren said.
A similar point of view was supported by economist from the University of Barcelona Sergi Basco. He noted that the lack of strict control over stablecoin issuers could provoke a massive withdrawal of deposits from banks, even if the assets are nominally secured by US government bonds. Basco cited the collapse of Silicon Valley Bank as an example, emphasizing that nominal security does not guarantee stability.
Warren also criticized President Trump's personal interests in the cryptocurrency sphere. The senator accused him of turning the White House into a "crypto ATM" after the launch of the TRUMP and MELANIA memecoins, which are said to have already brought the president significant income. In addition, she noted that Trump eliminated the Justice Department unit dealing with crypto crime, and also ordered the SEC to reduce regulation of the crypto market.
The senator previously proposed banning the president and government officials from participating in cryptocurrency projects to avoid conflicts of interest.
Experts and politicians continue to discuss the prospects for regulating cryptocurrencies and stablecoins, but the situation remains tense amid a rapidly changing market and the active influence of major players.
