U.S. GENIUS Stablecoin Bill Revised With Stricter Provisions, DeFi Executive Warns of Potential CBDC Control
The GENIUS Act, introduced by Tennessee Senator Bill Hagerty on Feb. 4, 2025, aims to regulate stablecoins like Tether’s USDT and Circle’s USDC. A recent revision to the bill, made on March 13, 2025, added tougher requirements, such as Anti-Money Laundering (AML) measures, reserve standards, liquidity provisions, and sanctions checks. These new provisions are expected to give U.S.-based stablecoin issuers an advantage over their offshore counterparts.
The U.S. government sees stablecoins as a means to maintain the dollar’s dominance in global payments, as stated by Treasury Secretary Scott Bessent during the White House Crypto Summit. Centralized stablecoin issuers back their digital tokens using U.S. bank deposits and short-term cash instruments like Treasury bills, which support the demand for the U.S. dollar and U.S. debt. Stablecoin issuers are currently the 18th-largest buyer of U.S. government debt, holding over $120 billion in Treasury bonds.
Jean Rausis, co-founder of decentralized trading platform Smardex, has strongly criticized the GENIUS Act, claiming it is essentially a gateway to a central bank digital currency (CBDC) through private entities. Rausis argues that by controlling stablecoins, the government could freeze funds at will, similar to what a CBDC would enable. He pointed out that stablecoins would give the government control over financial transactions but with the appearance of decentralization. Rausis believes that the bill’s approach would allow the government to exert control over digital assets without the need for creating a CBDC.
He emphasized the importance of decentralized alternatives, such as algorithmic stablecoins and synthetic dollars, as potential safeguards against increasing government control over crypto. Rausis warned that if centralized stablecoins gain too much traction, they could serve as a tool for government overreach in the crypto space.
The revised GENIUS Act has ignited a broader discussion on the future of stablecoins and their potential role in the global financial system. As the bill progresses, it remains to be seen how the U.S. government will balance regulation with innovation in the rapidly evolving world of digital currencies.