#StablecoinLaw

Critique of the GENIUS Bill on Stablecoins

The approval of the GENIUS bill on stablecoins, while seeking a long-awaited regulatory clarity, is not without potential negative consequences. First, the rush to legislate could generate excessively restrictive regulation that stifles innovation in the crypto space, particularly in the realm of decentralized finance (DeFi). In trying to fit stablecoins into traditional frameworks, there is a risk of imposing burdensome requirements that benefit incumbent players and marginalize smaller or truly decentralized projects.

Moreover, the law could open the door to greater government control over digital assets, compromising the very essence of decentralization that defines much of the crypto ecosystem. The imposition of strict compliance requirements (AML/KYC) on centralized stablecoin issuers, while necessary to some extent, could extend to the entire ecosystem, limiting user privacy and autonomy. This could lead to a balkanization of the market, where "regulated" stablecoins operate under distinct and less flexible rules, potentially losing the appeal of the global interoperability that characterizes cryptocurrencies.