Thesis and Controversy Surrounding the GENIUS Act on Stablecoins in the United States
The GENIUS Act, a proposed federal framework to regulate stablecoins in the United States, was passed by the Senate on Tuesday. However, the bill is currently being fiercely debated in traditional media and the fintech industry. Most supporters say the law provides clarity and consumer protection for cryptocurrencies with the same value as digital dollars. Opponents, on the other hand, say the bill could pose financial risks and potentially destabilize the U.S. economy.
Opposition Viewpoints and Media Triggers
In a July 17 editorial, The New York Times called the GENIUS Act a “chaotic proposal,” warning that its passage could destabilize the financial system. The paper compared stablecoins to the “free banking” era of the 19th century, warning that the use of these digital currencies would lead to similar disasters.
In testimony before Congress, Treasury Secretary Scott Bessent warned that stablecoin issuers could potentially hold more than $2 trillion in U.S. Treasury bonds. If panic selling causes customers to sell, bond prices could plummet, raising interest rates and causing disruptions in financial markets.
Expert Responses to the Concept of Stablecoins and the Era of Free Banking
In an analysis article on the social network platform X on Wednesday, William Hughes, senior advisor at blockchain company ConsenSys, argued against the comparison between modern Stablecoins and 19th-century free-banking paper money. He argued that this comparison is inaccurate because it lacks elements of technological infrastructure, legal control, and modern market mechanisms.
GENIUS Act under attack in the @nytimes
Presupposition: orange man bad. (this doesn’t drive the argument but is central to its intended rhetorical appeal. or so it seems. now with that out of the way)
The claim: Stablecoin are analogous to the free banking era of the… https://t.co/Au1BJoDUIU
— Bill Hughes 🦊 (@BillHughesDC) June 18, 2025
Hughes emphasized that the era of free banking was regional, lacked interoperability, and was vulnerable to limited control. Users only accepted this currency within a small community, while today's Stablecoins can be traded globally through central exchanges and DeFi markets. The frequency of data on Stablecoin usage requests is also constantly updated in real time on public platforms.
Additionally, he asserts, Stablecoins are regulated by federal and state regulatory agencies, while the free banking era had no clear regulatory system. He concludes that, although he is not a renowned scientist, he is skeptical that this comparison can predict the negative consequences of Stablecoins in the future.
Consumer Protection Policies and Review of the New Act
While some industry representatives support the GENIUS Act, other experts like Stephanie So, CEO of Geeq.io, argue that the bill leaves a lot of room for consumer protection. According to her, stablecoins need to ensure transparency in reserves and legitimize the ability to respond when incidents occur, to avoid direct risks to user rights.
These necessary changes are moving into the realm of feasibility because @GeeqOfficial‘s L0 protocolcannot be manipulated.
That is the infrastructure that trueconsumer protections need.
EVERYTHING ELSE is politics. Yes, words matter.Actions speak louder.Call me to…
— Stephanie So (@ComplicatedIsOK) June 17, 2025
Jack Zhang, CEO of global fintech platform Airwallex, expressed skepticism about the role of Stablecoins in cross-border payments between developed economies. He said that for G10 corporate transactions, Stablecoins have not yet proven to be superior to existing solutions, such as Airwallex's platform, which provides the ability to make fast, low-cost payments.
Source: https://tintucbitcoin.com/genius-act-gap-phan-doi-du-doan-anh-huong-lon/
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