As the U.S. Senate prepares to vote on the GENIUS Act later today, Senator Elizabeth Warren has raised new concerns about the bill. The stablecoin bill aims to bring clarity to the issuance and oversight of the stablecoin market.
However, according to Warren, the bill may contain dangerous loopholes that could harm the public and the broader economy.
Sen Warren Warns of Loopholes and Risks
On June 16, Senator Warren posted a statement on X criticizing the GENIUS Act. She stated that the bill has a major loophole and warned that it might let tech giants and large retailers issue their own private currencies structured as stablecoins.
According to Warren, this could give wealthy companies too much power and possibly allow them to track user activity. She added that the public might be left to cover the costs if such stablecoins fail.
She argued that the bill should not be passed without amendments to prevent these risks. Warren’s warning comes amid reports that big companies like Amazon and Walmart are interested in launching their digital currencies.
This has added urgency to the debate around how much power non-financial firms should have in the digital money world.
Supporters Say the Bill Includes Strong Safeguards
Many experts have responded to Warren’s post, stating that her fears may not match the bill’s content. Supporters of the GENIUS Act argue that the bill already includes strict rules to prevent misuse.
The stablecoin bill reportedly blocks big tech companies from directly launching stablecoins and includes strict rules. Any company offering a stablecoin must keep full reserves, undergo monthly audits, and follow tough anti-money laundering (AML) laws.
If a company like Amazon wanted to offer a stablecoin, it would first need to create or work with a regulated financial institution. Government agencies like the Federal Reserve and the FDIC would closely watch that entity.
While Warren remains a strong critic, other voices in Washington oppose the bill for different reasons. Former Congressman Justin Amash called the legislation a hidden attempt to slow down new types of money.
He warned it could give the government too much control over digital innovation.
Industry Believes the Bill Will Pass
The final Senate vote on the GENIUS Act is set for 4:30 p.m. today. If the bill passes, it will move on to the House of Representatives for further review. Despite the pushback, many believe the GENIUS Act will pass the Senate.
Nate Geraci, president of The ETF Store, pointed out that the bill has support from both parties. At the same time, more lawmakers and industry leaders are seeing stablecoin regulation as a needed step for the future of digital finance.
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