The banking sector and its supporters in the US Senate are mounting resistance against the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, fearing that stablecoins could bypass traditional banks and cut into their market dominance.
As reported by American Banker, the bill requires a 60-vote majority to pass the Senate, meaning at least seven Democratic senators would need to support it alongside Republicans. However, this may be a challenging hurdle to overcome, particularly with opposition from Senator Elizabeth Warren, a vocal critic of cryptocurrency. Warren is pushing for an amendment that would bar tech companies from issuing stablecoins. She stated:
“If these firms wish to participate in payments, they must collaborate with or operate through regulated financial institutions. This stablecoin bill disrupts that balance by permitting major tech corporations and other commercial entities to issue their own stablecoins.”
With their ability to facilitate near-instant transactions and lower cross-border payment costs, digital assets continue to challenge traditional banking models by offering more efficient peer-to-peer transactions.
Stablecoins and the Future of Digital USD
Senator Bill Hagerty introduced the GENIUS stablecoin bill on February 4, aiming to establish a structured regulatory framework for US dollar-backed digital tokens.
Following its introduction, Federal Reserve Governor Christopher Waller voiced support for allowing non-bank entities to issue stablecoins, highlighting their potential to expand financial services, especially in emerging markets, due to their cost efficiency.
Meanwhile, Bank of America CEO Brian Moynihan recently hinted at the bank’s potential entry into the stablecoin space, suggesting that it may develop its own USD-pegged digital token.
At the first White House Crypto Summit on March 7, Treasury Secretary Scott Bessent underscored the role of stablecoins in sustaining US dollar dominance. Notably, issuers of overcollateralized stablecoins collectively rank as the 18th largest holders of US government debt, surpassing nations like Germany and South Korea.
By embracing stablecoins and fostering their global adoption, the US government could leverage them as an economic tool—absorbing inflationary pressure while reinforcing the dollar’s standing as the world’s reserve currency.
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