On Senate Floor, Warren Outlines Critical Fixes Needed for Democrats to Support GENIUS Act; Outlines Concerns on Trump’s Stablecoin Corruption
“If the GENIUS Act goes forward without changes, Donald Trump will continue to line his pockets with his crypto scams - while his policies continue to tank the economy for the rest of us.”
“If the majority wants to establish a durable legal framework for digital assets, rather than just try to score political points, they will take these concerns seriously and agree to improve the bill.”
Washington, DC – U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, is speaking on the Senate floor tonight about the critical fixes needed to the GENIUS Act so that Democrats could support the stablecoin regulatory framework, including key issues around President Trump and his family owning and profiting from their own stablecoin.
Sen. Warren’s remarks as prepared for delivery:
Mr./Madame President, I rise today to talk about the GENIUS Act and the urgent need to strengthen the bill before the Senate votes on it later this week.
The GENIUS Act would create a framework for bringing stablecoins deeper into the US financial system. For those who are unfamiliar with stablecoins, they are a type of cryptocurrency whose value is pegged to the value of another asset, like the U.S. dollar. A stablecoin is similar to a bank deposit—only without the guarantees of a bank. A stablecoin is supposed to maintain a stable value, so a holder can redeem it to get their cash back on demand, and they can make payments with it, in theory.
Democrats want to work with Republicans to advance a stablecoin bill that will make stablecoins safer to use and curb the worst abuses of the industry. There are five areas that need revision:
- First, a bill must include basic rules so government officials can’t use stablecoin ventures to line their own pockets and so that foreign governments and giant corporations cannot use stablecoins to pay bribes to the President of the United States.
- Second, the bill must prevent Big Tech and other commercial firms from issuing stablecoins, preserving America’s historical separation between banking and commerce.
- Third, the bill must include basic consumer protections—the same as for any other financial transaction.
- Fourth, the bill must safeguard national security, providing the same guardrails as other payment systems to make sure we’re not turbocharging the financing of drug traffickers, terrorists, adversaries like North Korea, and scammers.
- And, fifth, the bill must have sufficient safeguards so that a stablecoin meltdown won’t trigger an economy-wide financial meltdown.
With adequate changes in those five areas, Democrats could support the GENIUS Act.
When the GENIUS Act was before the Banking Committee in March, Senate Democrats worked hard to improve the bill. Together, Democrats introduced nearly 70 amendments. We called for votes on more than two dozen of them. Every single Democrat voted for every amendment. Every single Republican voted no. When the bill advanced out of the committee, Democrats made clear they needed to see real changes to the bill before they could vote for it on the floor.
The version that will be voted on by the full Senate as early as this Thursday makes only minor changes, leaving the fundamental problems with the bill. I know the Republican majority intends to force this vote with no real changes. That would be a mistake. If the majority wants to establish a durable legal framework for digital assets, rather than just try to score political points, they will take these concerns seriously and agree to improve the bill.
Since the committee vote, President Trump’s aggressive efforts to profit from stablecoins and the obvious opportunities for bribery and other influence peddling have demonstrated why it is vital that we make meaningful, substantive reforms to the bill.
Let’s talk about how we got here. During his first term, Donald Trump was extremely critical of crypto, describing crypto as (quote) “highly volatile and based on thin air,” and highlighting that it can (quote) “facilitate unlawful behavior, including drug trade and other illegal activity.” When he ran for office in 2024, however, the crypto industry poured enormous sums of money into Donald Trump’s election, and, after he was elected, crypto leaders contributed another $18 million to his inauguration.
It was no surprise when Trump reversed his position and began to boost the industry. But it has been shocking to see Donald Trump move at breakneck speed to use his position as President to reap billions of dollars for himself personally and for his family.
The biggest corruption scandal in modern history is unfolding right now and no one is paying attention to it. Trump has created the opportunity to trade presidential favors like tariff exemptions, pardons, and government appointments for crypto purchases that will directly benefit himself and his family. And no one needs to speculate on what might happen—all of this is now happening in full view of the public.
Over his first 100 days, the President has enabled corruption on such an unprecedented scale that it would make some two-bit dictators blush.
Most people are aware that the meme coin Trump launched ahead of his inauguration was sagging in value. His recent announcement that he would host a dinner for the top 220 investors in the coin and provide an “exclusive bonus” VIP White House tour for the top 25 investors suddenly boosted his crypto venture. Trump has already made more than $300 million from trading fees alone and billions of dollars more in unrealized gains, since he owns 80% of the coins. That’s not his only corrupt crypto grift.
Two weeks after the Banking Committee voted on the GENIUS Act in March, President Trump’s crypto company World Liberty Financial launched its own stablecoin, called USD1. Don Jr. is promoting it as (quote) “just as safe as a bank account, but without all that extra nonsense.” USD1 was quietly launched less than a week ago, and its market capitalization now exceeds $2 billion. It is already the 7th largest stablecoin in the world. As the New York Times reported last week in a front-page story about Trump’s crypto corruption, “World Liberty Financial has eviscerated the boundary between private enterprise and government policy in ways without precedent in modern American history.”
And here’s the most egregious example. Trump’s stablecoin was issued on the network of Binance, the largest crypto exchange in the world. Binance is an interesting choice to be Trump’s partner in the stablecoin business. In 2023, Binance pleaded guilty to criminal charges after allowing “money to flow to terrorists, cybercriminals, and child abusers through its platform.” Its CEO went to jail after also pleading guilty to criminal money laundering charges. He is reportedly lobbying Trump for a pardon. What better way to buy off Donald Trump than to offer him a very favorable business deal in a stablecoin business?
The opportunity for corruption is not hypothetical. Trump has already given us a staggering example. Last week it was reported that an Abu Dhabi investment firm, MGX, is using Trump’s USD1 stablecoin to finance a $2 billion investment in Binance, essentially giving Trump a cut of the deal. The firm is chaired by the so-called “spy sheikh” of the United Arab Emirates and co-owned by G42, a firm with extensive ties to the Chinese government. The Trump organization recently announced plans to build a hotel and apartment building in the UAE, and buyers will be allowed to make payments in stablecoins.
The GENIUS Act makes this kind of corruption worse. There is nothing in the bill to stop it - instead, the bill would accelerate it. President Trump and the crypto industry are not trying to jam through this bill because they know it will make the bribery and corruption harder. They are trying to jam it through because they know it will turbocharge the size and scale of the stablecoin market and help boost the value of their own stablecoin ventures - all while containing no real restrictions on the President’s self-dealing.
Under the current version of the bill, President Trump is able to rake in transaction fees every time his stablecoin is used or traded. When trading is active, those fees are measured in the hundreds of millions of dollars.
Trump will also make money a second way: everyone who owns USD1 essentially provides Trump with an interest free loan. This means that Trump will make money on the assets backing the stablecoin and pay no interest to the holders of the coin. Big corporations and foreign governments can run the MGX play and use USD1 to cut Trump into business deals or openly pay him for tariff exemptions and other special deals, pardons, or appointments. For a giant corporation hoping to see a prosecution dropped or a license granted, Trump’s new stablecoin business creates a way to offer a payoff for the President of the United States to use his influence to get the desired outcome.
These massive opportunities for grift must be stopped, and Democrats have common sense amendments to do exactly that. For example, we propose that the President and all other elected officials and their families be barred from owning, controlling, promoting or otherwise participating in stablecoin business ventures. While I believe that all elected officials should be barred from buying, selling and trading stock, investments in stablecoin companies themselves create a special risk right now. Congress is currently writing laws that will sharply increase or decrease the value of these businesses. The public should know that no one is making decisions to further their own financial interests. The current version of the GENIUS Act contains no such restrictions. The Senate should not pass a bill that facilitates Trump’s breathtaking corruption and lines his pockets and welcomes other elected officials to do the same.
There are other fundamental problems with the GENIUS Act that need to be fixed.
It is crucial to prohibit the intermingling of commercial businesses and stablecoins. For centuries, our country has maintained a separation between our system of money and payments on the one side, and actual businesses in the real economy on the other side. That separation helps protect the stability of our financial system, promote fair competition in the economy, and prevent concentrating too much economic power in the hands of a few.
Democrats and Republicans have, time and again, linked arms to defend this separation. For example, when Mark Zuckerberg tried to leverage Facebook to create a stablecoin in 2019, both Democrats and Republicans said no—run Facebook or run a stablecoin operation, but don’t mix the two together. Under the GENIUS Act, however, Zuckerberg could launch his coin as soon as the bill is passed. This is of special interest to Elon Musk. He has already explained his plan to expand his social media platform X to a payment platform, X Money. He has said that he can use the reach of X so that in a few years his X Money will be (quote) “half of the global financial system.” He and other Big Tech billionaires would be free to issue their own currencies that compete with the U.S. dollar.
There is absolutely no reason to allow this. Other bipartisan stablecoin bills have not permitted this. Blessing co-president Elon Musk’s ambitions to overtake our money supply is completely unnecessary to build a safe and well-regulated stablecoin regime. Democrats have an amendment to prohibit intermingling between nonfinancial companies and stablecoin issuers, and we should make that change before we vote on the GENIUS Act on the floor.
It is also important to strengthen the GENIUS Act to safeguard our national security. Stablecoins now account for more than 60% of illicit crypto transactions, according to a recent public analysis from the blockchain analytics firm Chainalysis, making them (quote) “the new kingpin of illicit crypto activity.” The current version of the bill does little to prevent stablecoins from being exploited by terrorists, cartels, and criminals. In fact, compared to the version voted out of the Banking Committee, the current bill creates new loopholes to allow operators of so-called “decentralized” crypto exchanges and other services to continue circulating for noncompliant stablecoin issuers.
It is critical for service providers like crypto exchanges and custodians to maintain programs to check for illegal financial activity, and for our government to be able to sanction mixers that move millions for our adversaries. It is also important that terrorists and drug traffickers know they cannot escape sanctions enforcement by switching from dollars to stablecoins, and it is critical that stablecoin issuers be required to monitor the blockchains on which their stablecoins are traded. As drafted, the GENIUS Act does not include those safeguards. Democrats have language to fix that.
We need to ensure that the same basic consumer protections that apply when someone pays their rent using their checking account or buys a cup of coffee with a credit card also apply to stablecoins. For example, at a bare minimum, consumers should have easy access to their money if they want to redeem their stablecoins. However, the GENIUS Act does not do that, leaving consumers exposed to potential delays, process hurdles, and junk fees.
When it comes to consumer protection, the most recent version of the bill actually got worse compared to the version voted on in committee. The current GENIUS Act strips out certain protections, leaving consumers exposed to fly-by-night, scammy wallet providers to hold their stablecoins. And, get this, all but the very largest stablecoin issuers get to evade auditing requirements, leaving consumers vulnerable to the type of financial fraud that is rampant in the crypto ecosystem.
Notably, the Consumer Financial Protection Bureau is not mentioned once in this bill, despite the CFPB being responsible for enforcing our nation’s federal consumer financial laws. As Fed Chair Jerome Powell said in a Senate hearing shortly after DOGE attempted to shut down the CFPB, when the CFPB is not on the job enforcing consumer protection laws, there’s no one in the federal government to pick up the slack—no cop on the beat. And that’s exactly what the supporters of GENIUS are hoping for—no one in the federal government who has the expertise and the budget to be a real cop on the beat. The stablecoin scammers will target every person in America—and, under the GENIUS Act, they will run almost no risk of getting caught.
The current version of the GENIUS Act leaves consumers exposed to scams, fraud, and abuse. We can plug these holes and make sure that consumers are protected when making electronic payments, regardless of the technology underpinning the transaction. Democrats have amendments for that.
Finally, this GENIUS Act lacks the basic safeguards necessary to ensure that stablecoins don’t blow up our entire financial system.
This isn’t a hypothetical risk. Circle’s stablecoin dipped from $1 to $0.88 in March 2023, threatening a broader run in the crypto market. But regulators bailed out Circle’s and other big corporation’s deposits at Silicon Valley Bank to prevent a banking crash. Money market funds and the repo market, which pose similar risks as stablecoins, have been bailed out twice in less than 20 years. The threats stablecoins pose to our economic system are real—and once again, taxpayers will be called on to bail out millionaires and billionaires, only this time they’ll be the people fronting cryptocurrencies.
The bill as drafted permits stablecoin issuers to invest in riskier assets, including uninsured U.S. and foreign bank deposits and repo loans to hedge funds, and allows them to engage in risky non-stablecoin activities, like private credit or derivatives trading. At the same time, the bill constrains regulators’ ability to apply capital and liquidity safeguards to limit the chances of stablecoin failures, restricts regulators’ ability to enforce the already-weak requirements of the bill when a stablecoin issuer violates them, and stacks the deck against denying stablecoin applications submitted by risky companies.
In addition, regulators would have no authority to block concerning mergers and acquisitions, even if the new stablecoin owners have a history of financial fraud or money laundering. Sam Bankman-Fried wants to buy a stablecoin company while in prison? The GENIUS Act says go on right ahead.
Democrats have solutions to fix these financial stability weaknesses, and we should include them in the bill now.
If the GENIUS Act goes forward without changes, Donald Trump will continue to line his pockets with his crypto scams - while his policies continue to tank the economy for the rest of us. Efforts to personally pay off government officials like the President of the United States will accelerate, and they will happen out in the open. Big Tech billionaires will have even greater control over our economy. Terrorism financing and sanctions evasion risks will grow. Consumers will be at greater risk of getting cheated. Another financial crash will be more likely.
The problems with this bill are serious, but here’s the thing: they can be solved. Democrats have offered solutions throughout this process, and it is not too late. We can find common ground on a reasonable framework to regulate the stablecoin market and put those changes into the bill now. But we cannot bless Trump’s corruption and put consumers, our financial system, and national security at risk.
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