Senator Warren urges the swift implementation of the GENIUS Act and attention to the regulatory gaps in stablecoins

ChainCatcher news, Senate Banking Committee's chief Democrat Warren wrote to Treasury Secretary Basent, urging the swift implementation of the GENIUS Act and attention to its regulatory loopholes.

In the letter, Warren stated that the "U.S. Stablecoin Innovation GENIUS Act" is a "light regulatory framework for crypto banks," and the Treasury must take steps to implement and enforce the law to minimize serious risks to U.S. financial stability, consumers, taxpayers, and national security. The GENIUS Act was signed into law by Trump in July, requiring stablecoins to be fully backed by U.S. dollars or similar liquid assets, mandating annual audits for issuers with a market capitalization exceeding $50 billion, and establishing guidelines for foreign issuers. Currently, major U.S. agencies are working to implement the law. One of the main concerns for Democrats is regarding stablecoins; Paxos recently accidentally minted $30 billion worth of PYUSD stablecoins due to a technical issue. Warren stated, "This incident demonstrates that operational failures can pose serious risks to issuers, market integrity, and even financial stability. The Treasury needs to explain to the public how it intends to address these risks, and if it cannot, it should clarify what authorities it needs from Congress."