Stablecoin Bill Divides Lawmakers as Senator Warren Warns of Trump-Linked Conflicts of Interest

The passage of the Guiding and Establishing National Innovation for ￰3￱ Act, known as the GENIUS Act , has drawn sharp lines in Washington, with praise from industry leaders and regulators clashing against growing warnings from lawmakers, especially Senator Elizabeth ￰4￱ bill was signed into law by President Donald Trump on July 18, 2025 ; the GENIUS Act marks the United States’ first federal framework dedicated to regulating payment ￰5￱ Crypto Regulation Roundup: Trump signed the GENIUS Act into law — the first major ￰6￱ bill to clear Congress. #CryptoRegulation #GeniusAct ￰0￱ — ￰7￱ (@cryptonews) July 18, 2025 The White House hailed the legislation as a “historic moment for crypto and the U.

S. dollar,” emphasizing that it would position the nation as a leader in digital ￰8￱ law introduces strict rules on who can issue stablecoins, how reserves must be backed, and the disclosures required to ensure ￰9￱ creates a licensing pathway under the Office of the Comptroller of the Currency (OCC) for both banks and qualified non-banks, while excluding algorithmic or DeFi-native tokens for further ￰10￱ have described it as a long-awaited move to bring legal clarity to a market that had operated in a regulatory gray zone for ￰11￱ Leaders Call GENIUS Act “Beginning of a New Regulatory Era” Executives from leading digital asset firms have largely praised the ￰12￱ De Bode, chief strategy officer at Ondo Finance, called it “the beginning of a new regulatory era,” citing bipartisan cooperation that he believes will boost institutional participation in crypto ￰13￱ also noted that Patrick McHenry, former chair of the House Financial Services Committee and current vice chair of Ondo Finance, played a key role in advancing the bill.

Similarly, Bitpanda deputy CEO Lukas Enzersdorfer-Konrad described the law as a “breakthrough” that has renewed market optimism, pointing to a recent rally in Bitcoin and ￰14￱ Oh, CEO of Gluwa, emphasized that the framework “signals a strong commitment to responsible innovation, consumer protection, and long-term industry growth.” SEC Chair Paul Atkins praised the GENIUS Act on Tuesday, with the federal regulator calling it a "seminal" step. #SEC #PaulAtkins ￰1￱ — ￰15￱ (@cryptonews) August 19, 2025 Federal regulators have echoed these ￰16￱ Chair Paul Atkins called the GENIUS Act a “seminal step” for ￰17￱ regulation , acknowledging that while many challenges remain, the law provides much-needed ￰18￱ Secretary Scott Bessent went further, describing it as “essential” for maintaining American leadership in digital finance, predicting that stablecoins will expand dollar access globally and increase demand for U.

S. Treasuries. However, the praise has not been ￰19￱ recent weeks, major banking associations and lawmakers have voiced growing concerns about potential loopholes and systemic risks within the new ￰20￱ vs. Trump’s Treasury: Stablecoin Law Sparks $6.6 Trillion Banking Panic On August 13, a coalition of leading ￰21￱ trade groups, including the American Bankers Association, Bank Policy Institute, and Financial Services Forum, urged Congress to tighten the ￰22￱ warned that the GENIUS Act’s language could allow stablecoin issuers or affiliated entities to indirectly pay yield to holders, even though the law explicitly bans issuers from doing ￰23￱ banks have warned that a gap in the GENIUS Act could allow stablecoin issuers to skirt restrictions on paying yield to holders. #Stablecoin #Crypto ￰2￱ — ￰24￱ (@cryptonews) August 13, 2025 Such an arrangement, they cautioned, could divert up to $6.6 trillion in deposits from traditional banks into stablecoins, potentially driving up borrowing costs for households and ￰25￱ most forceful criticism, however, has come from Senator Elizabeth Warren, the top Democrat on the Senate Banking ￰26￱ a letter to Treasury Secretary Bessent, Warren accused the administration of overlooking corruption and conflicts of interest tied to Trump-linked allies involved in shaping the legislation.) retains enforcement ￰27￱ further criticized the bill’s failure to prevent Big Tech and large conglomerates from issuing private currencies, saying it risks allowing corporations to “take control over the money supply.” Warren added that the absence of stronger financial stability guardrails could make “destructive runs and demands for bailouts” more likely, urging Treasury to issue clear guidance barring the use of the Exchange Stabilization Fund (ESF) or any Federal Reserve 13(3) emergency facility to rescue the stablecoin industry.