On Senate Floor, Warren Urges Colleagues to Vote No on the GENIUS Act
FOR IMMEDIATE RELEASE
May 19, 2025
Contact: Marissa Davis (Banking)
On Senate Floor, Warren Urges Colleagues to Vote No on the GENIUS Act
Warren: “It doesn’t have to be this way. A bill that meaningfully strengthens oversight of the stablecoin market is worth enacting. A bill that turbocharges the stablecoin market, while facilitating the President’s corruption and undermining national security, financial stability, and consumer protection is worse than no bill at all.”
Washington, D.C. – Today, on the floor of the U.S. Senate, Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, spoke out against passing the GENIUS Act as currently drafted.
Floor Remarks as Prepared for Delivery
March 19, 2025
Senator Elizabeth Warren: I rise today to talk about the GENIUS Act. Analysts expect that passing the GENIUS Act could grow the stablecoin market ten-fold over the next three years. That would take a $200 billion market to a $2 trillion market, making it just a little smaller than the entire GDP of Canada.
Two weeks ago, Democrats refused to vote for the bill because it had inadequate safeguards for consumers, and it posed too much risk both for our financial stability and for national security. Democrats also voted no because the bill failed to address President Trump’s blatant crypto corruption.
Here we are again. So, what has changed with the bill? Not much. Its basic flaws remain unaddressed.
While a strong stablecoin bill is the best possible outcome, this weak bill is worse than no bill at all.
First, corruption. It is fitting that we are voting on the GENIUS Act just a few days before President Trump hosts a “private intimate dinner” and a VIP White House tour for the top investors in his meme coin–many of whom remain anonymous. Buyers, including some apparently foreign investors, reportedly spent an estimated $148 million in the contest, enriching Donald Trump and his family. And yet, this pay-to-play scheme is only the tip of the iceberg of the President’s crypto corruption.
Trump and his family have already pocketed hundreds of millions of dollars from his crypto ventures and they stand to make hundreds of millions more from his stablecoin, USD1, if this bill passes. It launched only weeks ago, but USD1 is already the 5th-largest stablecoin in the world. Passing this bill means that we can expect more anonymous buyers, big companies, and foreign governments to use the President’s stablecoin as both a shadowy bank account shielded from government oversight and as a way to pay off the President personally. For crooks, it's a two-for-one.
This is not a hypothetical problem. Already, an Abu Dhabi investment firm called MGX is using Trump’s stablecoin to finance a $2 billion investment in the Binance cryptocurrency exchange, essentially giving Trump a cut of this enormous financial deal. MGX is chaired by the intelligence chief of the United Arab Emirates and co-owned by a firm with extensive ties to the Chinese government.
If Congress passes this bill, USD1 won’t just be a coercive tool to pay off a corrupt President. It will be a financial instrument blessed by the United States Government. And this bill provides even more opportunities to reward buyers of Trump’s coins with favors like tariff exemptions, pardons, and government appointments.
For months, many Democrats have pushed for common sense ethics provisions in this bill. Unfortunately, the final bill does nothing—nothing—to rein in the President’s crypto corruption. But some supporters say that’s because the corruption is already happening and this bill won’t make it any worse.
That’s wrong. The GENIUS Act will accelerate Trump’s corruption by supercharging the size of the stablecoin market and the reach and profitability of USD1. And, for the first time in American history, it also makes our president—Donald Trump—the regulator of his own financial product.
This Congress should be a check on the President. Congress should not be making it even easier for him to line his pockets with even more shady crypto cash. If Congress does not fix this issue here, today, then it will be aiding and abetting his corruption every time President Trump’s stablecoin is used to finance a corrupt deal.
Second, financial stability. I am deeply concerned this bill will directly lead to the next financial meltdown.
This is not the first time Congress listened to the financial industry and created a weak regulatory regime for a new, innovative financial product. We’ve seen this story before, and we know how it ends.
Twenty-five years ago, Congress passed the Commodities Futures Modernization Act to support the obscure financial derivatives market. Almost nobody noticed. At the time, derivatives were a relatively niche financial product. Most people didn’t really understand what they were or what they did, but when the derivatives industry came knocking, begging for so-called regulation, Congress was happy to oblige.
After all, people said, surely some kind of regulatory framework was better than nothing. So Congress created a weak set of rules that was loaded with loopholes – just as the industry wanted. The result was a disaster: derivatives moved from the edge of the financial system to the center of it. The result of that law was to massively expand the reach of the derivatives market and further integrate it into the core financial system. That bill helped set the stage for the 2008 financial crash. Congress came back after the meltdown and cleaned up the mess in Dodd-Frank – but that was long after ten million families lost their homes and millions more lost their jobs to Wall Street greed.
In the last decade, we saw another version of this story - and just barely avoided another disaster because of it. In 2018, Congress debated and enacted S.2155, the bipartisan Economic Growth, Regulatory Relief, and Consumer Protection Act right here on the floor of the Senate.
Republicans and the banking industry pushed that bill, and a number of Democrats joined them as well.
They voted to roll back critical post-2008 crisis reforms for some of the largest banks in the country. Just five years later, three of those newly deregulated banks failed. Those three failures were the second, third, and fourth largest bank failures in American history. For a while, it looked like we might face a run on the whole banking system. Swift action by regulators to bail out uninsured depositors, and a whole lot of luck, are the only reasons we didn’t face yet another mass financial meltdown two years ago.
Now we are back, doing the same thing yet again. A financial meltdown triggered by crypto instability isn’t some alarmist fever dream. In fact, it nearly happened just a few years ago. Crypto markets abruptly lost $2 trillion dollars – that’s trillion with a T – after the collapse of several major crypto firms. In 2022, two of the largest stablecoins failed to maintain their pegs. Luckily, these cryptocurrency markets were mostly separate from the rest of the financial system, so we avoided mass economic destruction. That ends today if we enact this bill. The GENIUS Act folds stablecoins directly into the traditional financial system, while applying weaker safeguards than banks or investment companies must adhere to.
Make no mistake. We are likely to see another financial crisis in the coming years. And we are virtually certain to see another set of wild swings in cryptocurrency values. And it will be the American people who will bear the costs of a massive financial crash facilitated by the stablecoin market if Congress passes this bill.
Third, if this bill passes, it will mean easier access to money for terrorists and cartels. Even today, the crypto industry’s own analysts are calling stablecoins “the new kingpin of illicit crypto activity.” According to Chainalysis, a blockchain analytics firm, stablecoins account for more than 60% of all illicit crypto transactions. They are an ideal payment mechanism for cartels, terrorists, sanctions evaders, and human traffickers to finance crime. Unfortunately, the GENIUS Act massively expands the marketplace for stablecoins while failing to address the basic national security risks posed by them. The bill fails to apply anti-money laundering safeguards to exchanges and intermediaries that facilitate the movement, obfuscation, and custody of stablecoins.
It includes glaring loopholes that would allow Tether – which has reportedly become the cryptocurrency of choice for illicit actors because of its alleged willingness to turn a blind eye to money laundering – to now get access to U.S. markets. In fact, the bill text now contains a so-called “decentralized finance” loophole that allows Tether and other noncompliant stablecoins to access U.S. markets without any constraints - a loophole that doesn’t exist today, and that didn’t even exist in this bill until this weekend.
I do not want to see fentanyl traffickers or child pornographers or terrorists or countries avoid sanctions financing their operations with U.S. backed stablecoins. I certainly don’t want to see a major expansion of access to money by America’s adversaries. But if we pass this bill in its current form, that’s where we’re headed.
Fourth, if this bill passes, it will allow Elon Musk and Mark Zuckerberg to issue their own money. The bill still permits Big Tech companies and other conglomerates to issue their own private currencies. Community banks have warned us that by creating a parallel, lightly regulated banking system, the stablecoin market will drain deposits from our local communities. There will be less funding available for small businesses and households across our country. So if this bill becomes law, Congress will be responsible if a handful of giants take control of our money and then access and abuse troves of valuable consumer spending data. We will be responsible if small businesses struggle to access credit and more community banks disappear.
Finally, if this bill passes, main street investors will be at greater risk of getting robbed and scammed. The bill jeopardizes CFPB oversight and the suite of consumer protections people enjoy when using their Venmo app or bank account. If you get cheated using a stablecoin, you may be out of luck. Our constituents will be reaching out to our offices because they’ve fallen victim to a stablecoin scam or have been saddled with junk fees when they redeem their stablecoin, only to discover that in many cases there is no recourse.
Congress should not choose to enable the President’s egregious corruption.
Congress should not fuel the next financial crash.
Congress should not put consumers at risk for fraud or make it easier to fund terrorist activity.
It doesn’t have to be this way. A bill that meaningfully strengthens oversight of the stablecoin market is worth enacting. A bill that turbocharges the stablecoin market, while facilitating the President’s corruption and undermining national security, financial stability, and consumer protection is worse than no bill at all.
For these reasons, I urge my colleagues to vote NO on the GENIUS Act.
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