GENIUS ACT SHAKES UP STABLECOIN LANDSCAPE — PRIORITY CLAIMS UNDER FIRE

STABLECOIN HOLDERS TO GET FIRST DIBS IN BANKRUPTCY?

BANKING SECTOR ON ALERT

The U.S. Senate’s newly passed Genius Act is stirring waves in the finance world. The bill grants stablecoin holders priority claims on reserves in bankruptcy — putting them ahead of traditional bank customers.

Critics, including Georgetown’s Prof. Adam Levitin, warn this could subsidize stablecoin issuers at the expense of everyday depositors.

The Act mandates full backing with liquid assets like U.S. Treasuries, monthly reserve disclosures, and even freeze mechanisms.

While it aims to legitimize and secure stablecoins, its bankruptcy hierarchy is triggering major concern.

As the bill heads to the House, one thing is clear: a new stablecoin era may be coming — but not without consequences.

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