BlockBeats News, October 22: Senator Warren, the Chief Democratic Member of the Senate Banking Committee, wrote to Treasury Secretary Yellen urging the swift implementation of the GENIUS Act and highlighting regulatory loopholes. In the letter, Warren stated that the “U.S. Stablecoin Innovation GENIUS Act” represents a “lightly regulated framework for crypto banks,” and the Treasury Department must take action to implement and enforce the law to minimize serious risks to U.S. financial stability, consumers, taxpayers, and national security. The GENIUS Act, signed into law by Trump in July, requires stablecoins to be fully backed by the U.S. dollar or similar liquid assets, mandates annual audits for issuers with a market cap exceeding $500 billion, and establishes guidelines for foreign issuers. Currently, major U.S. agencies are working to implement the law.
One of the Democrats’ main concerns is regarding stablecoins. Recently, Paxos accidentally minted $30 trillion worth of PYUSD stablecoin due to a technical issue. Warren stated: “This incident demonstrates that operational failures could pose a serious risk to the issuer, market integrity, and financial stability. The Treasury Department needs to explain to the public how it intends to address these risks and, if it cannot, it must clarify what authorizations it needs from Congress.”
