Elizabeth Warren Criticizes Trump’s Stablecoin Law as Risky for Financial System

Senator Elizabeth Warren has launched a sharp critique against the GENIUS Act, legislation signed by former President Donald Trump that governs stablecoin issuance. Warren labeled the law a "disaster waiting to happen," arguing it grants excessive freedom to crypto firms while exposing the U.S. financial system to undue risk.

The Guiding and Establishing Innovation for U.S. Stablecoins Act mandates stablecoin issuers to maintain full reserves in U.S. dollars or liquid assets and undergo annual audits if their market value exceeds $50 billion. Despite being hailed as a regulatory milestone, Warren contends the framework lacks sufficient oversight, particularly for crypto banks.

Concerns have intensified due to Trump's ties to World Liberty Financial USD, a stablecoin operated by his family and now among the largest in circulation. Warren is pressing the Treasury to address potential conflicts of interest and close regulatory gaps to protect consumers and the broader economy.