Senator Elizabeth Warren is blasting President Trump’s new crypto law, the GENIUS Act, warning it could lead to another financial crisis like 2008. She argues the bill was written to benefit the crypto industry, not everyday Americans.
The GENIUS Act: A Crypto Industry Power Grab?
Warren claims the act was essentially written by crypto insiders, not for the public good. She points to the Trump family’s involvement in memecoins (like Official Trump and Melania) and a USD stablecoin, all while pushing for less regulation. Forbes estimated the President’s crypto holdings at a whopping $1 billion in June. Adding fuel to the fire, Warren highlights Trump’s disbanding of the DOJ’s crypto enforcement unit, essentially removing oversight. She accuses Trump of using his presidency to personally profit from crypto. The whole process, she says, gave crypto lawyers and lobbyists too much influence, creating rules that favor big players at the expense of consumer protection.
Déjà Vu All Over Again?
Warren draws a parallel to the 2000 Commodity Futures Modernization Act, which deregulated over-the-counter derivatives and contributed to the 2008 financial crisis. She reminds us of the devastating impact – millions of families lost homes, jobs, and savings. Her core argument: letting an industry write its own regulations rarely ends well.
GENIUS Act: Some Good, But Not Enough?
While the GENIUS Act does include some stricter rules – like requiring stablecoin issuers to hold substantial reserves and undergo regular audits – Warren and others remain skeptical. Even with these improvements, they worry that without proper oversight, the system could still collapse. The increased reserves are already having an effect; Tether, a major USD-pegged token, has increased its reserves to meet the new requirements.
A Future of Private Currencies?
Some economists fear the GENIUS Act could lead to a chaotic system of private currencies, similar to the “Free Banking Era,” where banks issued their own money, leading to instability. Imagine Walmart or Amazon launching their own cryptocurrencies, bypassing traditional banks and payment systems. This could result in hundreds of different digital currencies, each with its own potential for failure.