- Elizabeth Warren warns of GENIUS Act’s financial risks.
- Market impact likened to past financial crises.
- Act facilitates crypto use in mortgage markets.
Senator Elizabeth Warren issued a stark warning about the recently passed GENIUS Act, stating it exposes American consumers to financial risks due to relaxed regulatory oversight.
This act integrates digital assets into traditional finance, prompting concerns about systemic instability, akin to past financial crises, with cryptocurrencies like BTC and ETH directly impacted.
Senator Elizabeth Warren issued strong warnings about the GENIUS Act, asserting it exposes consumers to financial risk. She highlights regulatory gaps and industry influence as principal concerns. The senator calls for urgent legislative revision to safeguard the public.
Warren, a senior U.S. Senator, spoke against the act. She argued it provides a green light for fraud, linking its framework to past financial crises. President Donald Trump signed the act as part of his deregulation and digital asset support effort.
The act’s passage allows Fannie Mae and Freddie Mac to count crypto holdings as mortgage collateral, a significant policy shift. It encourages a deeper integration of digital assets into traditional finance systems, sparking institutional interest in stablecoin development.
Financial implications emerge as the act sets national standards for stablecoin issuance, impacting assets like BTC, ETH, and USDC. Experts warn of systemic instability risks, pointing out parallels with the 2008 financial crisis through regulatory loopholes.
Industry observers note the potential for increased speculative practices amid the real estate sector. Regulatory capture and reduced oversight are concerns as the DOJ’s crypto enforcement unit faces disbandment, highlighting a shift in regulatory priorities.
Insights suggest systemic risks might arise from the act. The ability to use crypto as collateral could lead to a run on digital assets akin to traditional banking instability unless regulatory guardrails are reinforced, experts caution. “The risk of bank runs from unstable digital assets is very real if the regulatory guardrails aren’t properly enforced.” — Sergi Basco, Economics Professor (source)
