Senator Warren urges prompt implementation of the GENIUS Act and attention to stablecoin regulatory loopholes

ChainCatcher news, the chief Democrat of the Senate Banking Committee, Warren, sent a letter to Treasury Secretary Bessent, urging the prompt implementation and enforcement of the GENIUS Act and attention to regulatory loopholes within it.

In the letter, Warren stated that the "US Stablecoin Innovation GENIUS Act" is "a light-touch regulatory framework for crypto banks." The Treasury Department must take steps to implement and enforce this law to minimize serious risks to US financial stability, consumers, taxpayers, and national security. The GENIUS Act, signed into law by Trump in July, requires stablecoins to be fully backed by US dollars or similarly liquid assets, mandates annual audits for issuers with a market capitalization exceeding $50 billion, and sets guidelines for foreign issuance. Currently, major US agencies are working to implement this law. One of the main concerns of Democrats is related to stablecoins; Paxos recently accidentally minted $3 trillion PYUSD stablecoins due to technical issues. Warren stated: "This incident demonstrates that operational failures can pose serious risks to issuers, market integrity, and even financial stability. The Treasury Department needs to explain to the public how it intends to address these risks, and if it cannot, it should clarify what authorizations it needs from Congress."