Senator Warren Opposes the GENIUS Stablecoin Act
Date: 2025-10-24 Author: Henry Casey Categories: CRYPTO PAYMENTS
Democratic Senator Elizabeth Warren criticized the Guiding and Establishing Innovation for U.S. Stablecoins Act (GENIUS), calling it too lenient on cryptocurrency companies. In a letter to U.S. Treasury Secretary Scott Bessent, she emphasized that the bill paves the way for "insufficient oversight of crypto banks" and could pose a threat to the nation's financial system.
According to Warren, the initiative being promoted in Congress does not provide sufficient safeguards and fails to address potential risks to the U.S. economy and security. The senator believes the Treasury Department should implement the law with the utmost caution, focusing on consumer protection and mitigating systemic risks.
Warren focused specifically on potential conflicts of interest associated with former President Donald Trump. She called on the Treasury Department to ensure transparency and develop concrete steps to eliminate the influence of personal or political interests on the implementation of GENIUS provisions. According to the senator, any form of political dependence on regulatory implementation could undermine trust in financial institutions.
In her address, Warren cited the Paxos incident, in which a technical error caused the company to accidentally issue $3 trillion in PYUSD stablecoins. This incident, she emphasized, demonstrates how dangerous failures in issuers' systems can be for market stability and trust in digital assets. She noted that such errors could cause a chain reaction in the financial sector if strict controls are not put in place.
The senator demanded that the Treasury Department provide detailed explanations on how it intends to prevent similar incidents in the future. She also asked for clarification on what additional powers the agency might need to effectively oversee stablecoin issuers and crypto payment operators.
Warren previously warned of the risk of a financial crisis if the GENIUS Act is passed without a thorough review of safeguards. She believes that the law, in its current form, favors crypto banks rather than ensuring the stability of the financial sector. She emphasized that digital asset regulation should be based on principles of transparency, accountability, and protecting the public interest, rather than relaxing oversight for the sake of technological innovation.
Thus, the senator's position reflects growing concerns among some lawmakers that the rapid development of the stablecoin market could lead to new threats to the US economy if regulatory measures are not strict enough.
