A Storm brews over the GENIUS Act: Trumps' family stablecoin under fire
Senator Warren vocalizes opposition towards the GENIUS Act due to perceived links between Trump's proposed stablecoin and the legislation.
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Toggle* Senator Elizabeth Warren dumps backing for the GENIUS Act due to Trump-backed USD1 stablecoin* A deal between USD1 and UAE-MGX raises eyebrows and whispers of corruption* The USD1 stablecoin climbs to be the 7th largest in the world* 10 Senators have withdrawn support due to security and ethical concerns* World Liberty Financial (WLFI), co-founded by Eric Trump, halts exchange listings amidst regulatory uncertainties
The GENIUS Act, a proposed bill aiming to regulate stablecoins within the US, faces a rough passage in the Senate, with rising criticism centered on President Donald Trump's involvement in the USD1 stablecoin. This controversy highlights the intertwining of politics, cryptocurrency, and financial regulation in the US.
Senator Warren publicly denounces the Senate's approval of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. Her opposition stems from fears of conflicts of interest due to Trump family's ties to the USD1 stablecoin.
The USD1 stablecoin, a short-term U.S. Treasuries-backed currency, has rapidly surged, becoming the seventh largest globally. Notably, this is largely due to a partnership between USD1 and UAE-based MGX, striking a $2 billion arrangement for Binance, the global cryptocurrency exchange.
Responding to this, Warren took to social media, warning, "The Trump family stablecoin surged to 7th largest in the world because of a shady crypto deal with the United Arab Emirates—a foreign government that will give them a crazy amount of money. The Senate shouldn't pass a crypto bill this week to facilitate this kind of corruption."
Politicians' Unrest
The GENIUS Act, which initially garnered bipartisan support, now faces turmoil as at least ten Senators have withheld their backing. Most cite concerns over insufficient anti-money laundering protection and national security safeguards.
The bill, proposed by Senator Bill Hagerty, sailed smoothly through the Senate Banking Committee in March. However, its future remains uncertain, given the swift political shift. Warren attempted to amend the bill, aiming to impose stricter oversight on foreign firms and prohibit stablecoins used in illicit activities. Her amendments fell short, prompting her to caution that "every senator must vote no—or risk aiding and abetting Trump's corruption."
When questioned about potential profits from crypto ventures, President Trump nonchalantly replied, "I haven't even looked," admitting, "If I own stock in something and the stock market goes up, I guess I'm profiting."
Market Repercussions
The mounting controversy surrounding the GENIUS Act bears real-world impacts on WLFI and its USD1 stablecoin. WLFI, co-founded by Eric Trump, has postponed its exchange listings while awaiting regulatory clarity.
This delay could affect USD1's competitive edge against established leaders like Tether in the $245 billion global stablecoin market. Most tokens in this sector are backed by short-term U.S. Treasuries and other debt instruments.
The GENIUS Act's chances of passage have diminished due to political and ethical concerns, with some supposedly favorable votes in doubt. The bill's future hangs in the balance as it heads towards a possible floor vote in the coming days.
Warren has framed this issue as an ethical dilemma, stating, "This is a bill that would make it even easier for the president and his family to profit off their own stablecoin and oversee their own financial company."
On the other hand, President Trump defends his crypto initiatives as critical for American competitiveness, insisting, "If we don't do it, China's going to," while claiming millions of supporters for these initiatives, despite Democrat opposition.
This developing scenario underscores the difficulties of creating regulatory frameworks for nascent technologies like cryptocurrency when political and financial interests overlap.
- Senator Elizabeth Warren publicly denounces the Senate's approval of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, citing fears of conflicts of interest due to Trump family's ties to the USD1 stablecoin.
- The USD1 stablecoin, a short-term U.S. Treasuries-backed currency, has rapidly surged to become the seventh largest globally, largely due to a partnership between USD1 and UAE-based MGX.
- Warren took to social media, warning that the Trump family stablecoin surged to 7th largest in the world because of a shady crypto deal with the United Arab Emirates, hinting at corruption.
- The GENIUS Act, initially garnering bipartisan support, now faces turmoil as at least ten Senators have withheld their backing, citing concerns over insufficient anti-money laundering protection and national security safeguards.
- WLFI, co-founded by Eric Trump, has postponed its exchange listings while awaiting regulatory clarity, which could affect USD1's competitive edge against established leaders like Tether in the $245 billion global stablecoin market.
- The mounting controversy surrounding the GENIUS Act bears real-world impacts on WLFI and its USD1 stablecoin, underscoring the difficulties of creating regulatory frameworks for nascent technologies like cryptocurrency when political and financial interests overlap.
- President Trump defends his crypto initiatives as critical for American competitiveness, insisting, "If we don't do it, China's going to," while claiming millions of supporters for these initiatives, despite Democrat opposition, highlighting the intertwining of politics, cryptocurrency, and finance in the US.
