Bankers and their supporters in the US Senate are resisting the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act due to concerns that stablecoins may marginalize banks and diminish their share in the banking sector.
As reported in an article by American Banker, the legislation needs 60 votes to be approved in the Senate, indicating that at least seven Democrats will need to align with Republicans to advance the Act.
This could present a formidable challenge, as US Senator Elizabeth Warren, one of crypto’s fiercest political opponents, is advocating for an amendment that would prevent technology companies from issuing stablecoins. Warren stated:
“If these companies wish to engage in payments, they must collaborate with, or facilitate transactions among, regulated financial institutions. However, this stablecoin legislation disrupts that existing framework by allowing large tech corporations and other commercial entities to issue their own stablecoins.”
Digital currencies remain a transformative element in finance and banking thanks to near-instant settlement periods and lower transaction fees, which greatly alleviate the challenges of cross-border payments and enable peer-to-peer interactions.
Page one of the GENIUS Act of 2025. Source: US Senate
Related: The GENIUS stablecoin legislation is a CBDC trojan horse — DeFi executive
Stablecoins: The path forward for USD in the 21st century?
The GENIUS stablecoin legislation was presented by Senator Bill Hagerty on February 4 as a thorough regulatory framework for tokenized US dollars.
Shortly following the introduction of the bill to the US Senate, Federal Reserve Bank Governor Christopher Waller asserted that non-bank entities should be permitted to issue stablecoins.
Waller contended that stablecoins could broaden payment applications, especially in developing regions, given their cost-effectiveness and efficiency.
Stablecoin fees compared to traditional payment processing solutions. Source: Simon Taylor
Bank of America CEO Brian Moynihan expressed to an audience at the Economic Club of Washington DC that the bank may venture into the stablecoin domain — likely initiating its own dollar-pegged stable token.
During the inaugural White House Crypto Summit on March 7, Treasury Secretary Scott Bessent mentioned that the US will utilize stablecoins to reinforce US dollar supremacy.
Overcollateralized stablecoin issuers collectively rank as the 18th largest purchasers of US government debt globally — surpassing nations like Germany and South Korea.
By endorsing pro-stablecoin policies and advocating for stablecoin usage internationally, the US government can employ stablecoins as a tool to absorb inflation and maintain the dollar’s status as the worldwide reserve currency.
Magazine: Unstablecoins: Depegging, bank runs and other threats loom
