Senator Warren opposes the GENIUS Act over concerns linked to the Trump-backed USD1 stablecoin deal.
Ten senators withdrew support after claims the bill lacks strong money laundering and security protections.
WLFI paused USD1 exchange listing plans as it waits for clear regulatory direction on the GENIUS Act.
US Senator Elizabeth Warren has raised opposition to the GENIUS Act, citing concerns over financial gains tied to a Trump-backed stablecoin. The legislation, once supported across party lines, now faces growing resistance in the Senate.
https://twitter.com/SenWarren/status/1919135145849729282
The bill, officially known as the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, seeks to regulate stablecoins across the US. However, its link to the USD1 stablecoin has stirred controversy. Critics say the legislation could create unfair advantages for Trump-linked financial entities.
USD1 Stablecoin Deal Draws Scrutiny
At the center of the controversy is World Liberty Financial (WLFI), a firm backing USD1. WLFI recently entered a deal with UAE-based firm MGX. This arrangement reportedly relies on the USD1 stablecoin to finalize a $2 billion investment through Binance. The partnership caused a spike in USD1’s trading volumes and market cap.
Senator Warren raised concerns about this arrangement, noting the possibility of an unjust financial benefit. According to her office, the deal may create loopholes in financial transparency and enforcement. She also warned of potential national security risks due to limited anti-money laundering provisions in the bill.
Senators Withdraw Support Ahead of House Vote
Ten senators have withdrawn their support following Warren's objections. They cited the bill’s failure to include clear safeguards on money laundering and foreign interference. This shift in opinion now threatens the bill’s prospects in the House of Representatives.
Despite this, the Trump administration had previously expressed high confidence in the GENIUS Act. Officials expected the bill to pass before the end of May. However, growing pushback from lawmakers has slowed its momentum.
WLFI Pauses USD1 Exchange Plans
WLFI is now pausing its plans to list USD1 on centralized exchanges. Reports suggest the firm is waiting for clarity before moving forward with its roadmap. The delay could impact USD1’s efforts to challenge Tether, which remains the dominant stablecoin in the market.
Lawmakers are now under pressure to review the bill’s implications before the House vote. With support dwindling, the future of the GENIUS Act remains uncertain. The Trump administration may face added challenges in pushing the legislation through without significant amendments.
