๐ August 14 | Washington, D.C., United States
The US banking industry is sounding the alarm against the recently enacted "Genius Act," signed by former President Donald Trump. The law, presented as a boost to financial and technological innovation, is now being accused by banks and regulators of jeopardizing the stability of the system and opening potential security breaches. Between emergency meetings, official statements, and political pressure, financial institutions are seeking Congressional intervention before the damage becomes irreversible.
From promise to controversy
The Genius Act was touted as "visionary" legislation that would pave the way for new business models in digital payments, tokenization, and decentralized banking. However, the first months of its implementation have raised concerns:
Risk of exposure to high-leverage transactions without sufficient oversight.
Potential misuse of banking structures for unregulated digital assets.
Gaps in anti-money laundering (AML) and KYC control protocols.
The American Bankers Association and other influential groups sent a formal letter to the Treasury Department and key lawmakers, requesting โimmediate modificationsโ to mitigate what they call โlatent systemic risks.โ
Clash between innovation and prudence
While the Trump administration defended the Act as an opportunity to compete globally in financial technology, critics point out that the lack of clear rules for new entrants into the ecosystem opens the door to fraud and a possible โlegal bubbleโ that could undermine confidence in the banking system.
Legislative sources indicate that specific amendments are already being considered, including greater oversight of crypto-banking operations and the requirement to report real-time risk metrics. The discussion promises to be intense: on the one hand, the pro-innovation bloc sees the law as a catalyst for growth, and on the other, the regulatory bloc prioritizes stability over experimentation.
Topic Opinion:
The Genius Act appears to be a classic example of how political speed sometimes trumps technical preparation. Innovation must go hand in hand with solid regulation, or the price to pay can be very high. In this case, the balance between opportunity and risk is not optional; it is urgent.
๐ฌ Do you think the Genius Act is a leap into the future?
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