Elizabeth Warren criticizes GENIUS Act over stablecoin concerns ahead of final vote

Senator Elizabeth Warren has voiced fresh concerns about the GENIUS Act, a bill designed to regulate stablecoins in the US financial system, ahead of its final vote scheduled for later today.

In a June 16 statement on X, Warren claimed the bill could allow billionaires to launch stablecoins that monitor user activity and gain an unfair edge in the market. She also cautioned that any fallout from such initiatives might later require taxpayer bailouts.

According to her:

“The GENIUS Act has a major loophole allowing Big Tech companies and major retailers to issue their own private currencies structured as stablecoins. This bill shouldn’t pass without amendments preventing these risks.”

Her remarks follow recent speculation that major retailers like Amazon and Walmart are exploring entry into the space. This has added urgency to discussions around the scope and safeguards of the GENIUS Act.

However, market observers have pointed out that Warren’s criticism and fears do not align with the bill’s provisions.

Currently, the GENIUS Act bars non-financial Big Tech companies from directly issuing stablecoins. It also enforces strict regulatory requirements, including full reserve backing, monthly audits, and comprehensive anti-money laundering (AML) compliance.

So, if a company like Amazon wanted to offer a stablecoin, it would likely need to set up a regulated financial entity or partner with an existing one.

Market experts also say this process would involve extensive oversight from federal bodies like the Fed and the FDIC.

The GENIUS Act’s final vote

This development comes as the GENIUS Act is now headed for a final vote and debate in the US Senate.

According to an update from the Senate cloakroom, the bill’s final vote is scheduled for June 17 at 4:30 P.M. If approved, the bill will proceed to the House of Representatives.

However, the bill still faces significant opposition from critics like former congressman Justin Amash, who called it a “backdoor effort to sabotage monetary innovation.” He warned that it could allow the US government to monitor and control emerging digital currencies.

Despite the opposition, industry observers such as Nate Geraci, president of The ETF Store, believe the bill will likely pass. They note strong bipartisan support and growing political momentum behind the emerging industry as essential factors that would drive the stablecoin legislation.

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