Warren Sounds the Alarm Over Stablecoin Legislation
Senator Elizabeth Warren has raised serious concerns over the recently passed GENIUS Act, warning it could lay the groundwork for a new financial crisis in the United States. The law, which provides a regulatory framework for stablecoins, was signed by President Donald Trump and has already caught the attention of big banks and retailers. But Warren sees it as a red flag—and she’s not mincing words.
“Americans Can’t Afford This Law”
In an interview with Vanity Fair, Warren didn’t hold back, stating the law was essentially “written by the crypto industry for the crypto industry.” She argued that when Washington serves corporate interests, it’s average Americans who end up paying the price. The senator compared the GENIUS Act to the Commodity Futures Modernization Act of 2000, which many economists believe contributed to the 2008 financial meltdown.
The False Promise of Stability
Warren’s concerns go beyond the political implications. She believes the law creates a false sense of security around stablecoins. According to economist Sergi Basco of the University of Barcelona, the legislation could mislead consumers into thinking that all stablecoins are inherently safe just because they’re issued by “respectable” companies. But that’s not the case—without proper oversight, even coins backed by U.S. Treasury bonds could lead to bank-like panics.
Basco points to the collapse of Silicon Valley Bank as an example of how “safe” assets can still cause economic upheaval under poor risk management. Simply put, backing stablecoins with government debt does not eliminate the risk of collapse.
Trump’s Crypto Ties Under Fire
Warren also took direct aim at Trump’s personal involvement in crypto ventures. She claims he has essentially turned the White House into a crypto ATM, launching meme coins and stablecoins that have reportedly earned him hundreds of millions. Even more concerning to her is the dismantling of regulatory bodies: Trump allegedly eliminated the Justice Department’s crypto crime division and instructed the SEC to pull back oversight of the crypto sector.
Lobbying Power Reaches New Heights
According to Warren, the crypto industry’s record-breaking lobbying efforts played a major role in pushing the GENIUS Act through Congress. She likened it to the most aggressive lobbying periods by Wall Street banks, stating: “This is a town where money talks—but what the crypto industry just did goes beyond anything we’ve seen before.”
Conclusion: A Crisis in the Making?
Elizabeth Warren’s dire warnings about the GENIUS Act highlight growing concerns among lawmakers and economists alike. While the crypto industry celebrates regulatory clarity, critics argue that handing the pen to industry lobbyists may result in disastrous long-term consequences. As stablecoins edge closer to mainstream finance, the need for robust, impartial regulation has never been greater. Warren’s message is clear: regulation written by profit-driven players is a recipe for crisis—not innovation.
