Big Tech’s Crypto Nightmare: GENIUS Act Threatens Meta, Amazon, Google With Stablecoin Blackout
Washington draws a line in the sand—tech giants may soon find their stablecoin ambitions dead on arrival.
The updated GENIUS Act could slam the brakes on Meta’s Diem revival fantasies, Amazon’s whispered ’Project Nile,’ and Google’s quiet blockchain experiments. No more playing banker without a license.
Regulators clearly aren’t buying the ’we’re just infrastructure’ argument this time. Maybe because these companies’ idea of ’stable’ coins still fluctuates with their stock prices.
Could the GENIUS Act Pass with New Amendments?
Stablecoin regulations are a priority issue for US crypto regulation, and the GENIUS Act is currently the industry’s best hope for passing them.
Although its success seemed likely last week, it failed in the Senate after stiff Democratic opposition and Republican defections. However, rumors claim that the GENIUS Act has new bipartisan amendments that might see it through.
Generally, the GENIUS Act amendments fall along the same axis: addressing the concerns that caused it to fail last week. These include limiting the potential for fraud in a few ways, like making it clear that these products have no consumer protection under the FDIC or federal affiliation.
However, one sticks out in particular, with huge implications:
“Prohibits non-financial publicly traded companies from issuing a stablecoin unless they can meet strict criteria regarding financial risk, consumer data privacy, and fair business practices. This helps prevent companies like Meta, Amazon, Google, and Microsoft from issuing a stablecoin and maintains the separation between banking and commerce,” one version reads.
Reports claim these GENIUS Act amendments come from two Senate sources. However, a different version has also been circulating, and it suggests that Big Tech may be prohibited from holding stablecoins in any manner.
The bill’s language has not been finalized, so either version could be accurate.
Here’s a preview of how the GENIUS Act might — final text pending — limit major tech companies from owning stablecoins.
Tech companies would be prohibited from issuing stablecoins "unless they can meet strict criteria regarding financial risk" https://t.co/Lh2h4ZoxO8 pic.twitter.com/Wp0UtwbsIA
Specific Amendments and Their Goals
Skeptical lawmakers have good reason to make this a top regulatory priority, as stablecoins have attracted a lot of news. Putting aside the enormous use case for stablecoins in mundane criminal activities, these GENIUS Act amendments seem tailored to recent specific incidents.
Take, for example, the requirement that stablecoins can’t directly bear US-themed branding. Trump’s USD1 has generated massive controversy, and it has no direct affiliation with the government.
The GENIUS Act amendments aim to ban Big Tech from launching stablecoins, and Meta proposed using them less than a week ago.
Most of all, the GENIUS Act amendments are explicitly intended to “maintain the separation between banking and commerce.” Tether has been investing unbelievably vast resources in new US stablecoin opportunities, spending $65 billion on US Treasury bonds in only three months.
Big Tech has ample cash to throw around, so it needs tight guardrails. The other GENIUS Act amendments detail a few such guardrails. For example, they loosen the requirements for enforcement actions against stablecoin issuers.
They also place these actions under the Treasury’s purview, as other regulators like the SEC and CFTC have been gutted.
Additionally, one specifically names Elon Musk as a federal employee with strong conflicts of interest on this matter, but it names others.
Again, these amendments have not been finalized, so it’s not clear if the GENIUS Act will even pass. However, in any event, these proposals represent a massive win for the crypto-skeptical faction in Congress.
