Senator Warren urges the swift implementation of the GENIUS Act and to follow up on stablecoin regulatory loopholes.

On October 22, Senate Banking Committee Chief Democrat Warren sent a letter to Treasury Secretary Basent, urging the swift implementation of the GENIUS Act and attention to its regulatory loopholes. In the letter, Warren stated that the “U.S. Stablecoin Innovation GENIUS Act” is a “light regulatory framework for encryption banks,” and the Treasury must take measures to implement and enforce the law to minimize the serious risks to U.S. financial stability, consumers, taxpayers, and national security. The GENIUS Act was signed into law by Trump in July, requiring stablecoins to be fully backed by USD or similar liquid assets, mandating that issuers with a market capitalization of over $50 billion undergo annual audits, and establishing guidelines for foreign issuers. Currently, major U.S. institutions are working to implement the law. One of the main concerns for Democrats is regarding stablecoins; Paxos recently minted $30 billion of PYUSD stablecoin due to a technical issue, to which Warren responded: “This incident shows that operational failures can pose serious risks to issuers, market integrity, and even financial stability. The Treasury needs to explain to the public how it intends to address these risks, and if it cannot, it needs to clarify what authorizations it requires from Congress.”