U.S. Senator Warren criticizes GENIUS bill... "Trump conflict-of-interest issue must also be resolved"

Elizabeth Warren, the Democratic ranking member of the U.S. Senate Banking Committee, strongly criticized the stablecoin regulatory law 'GENIUS Act' signed by President Donald Trump last July.

On the 21st (local time), according to The Block, Warren said in a letter to Treasury Secretary Scott Bessent that "the GENIUS bill is, in effect, merely a 'light regulatory framework for crypto banks'" and added, "the Treasury must take strong measures when implementing this law to ensure that serious risks to U.S. financial stability, consumers, taxpayers, and national security do not arise."

The GENIUS bill requires stablecoin issuers to maintain 100% collateral in highly liquid assets such as dollars and mandates annual audits for issuers with market capitalizations of $50 billion or more. However, Warren pointed out that the law still has many gaps in terms of financial risk management.

She also raised the possibility of conflicts of interest between President Trump and the crypto industry. Warren said, "The stablecoin of World Liberty Financial (WLFI), run by the Trump family, has already grown to the largest scale in the world," and emphasized, "the Treasury must block the potential for corruption during implementation of the law and design regulation independent from conflicts of interest."

She urged, "The Treasury should develop specific measures to address these risks and clarify anti-money laundering and consumer-harm prevention measures," and added, "If it lacks the necessary authority, it should ask Congress for additional legislation."

Warren also referred to the case in which Paxos mistakenly issued PYUSD worth $3 trillion due to a technical error, noting, "Operational failures can have serious effects not only on issuers but also on market stability and the entire financial system."

Meanwhile, Federal Reserve (Fed) Governor Michael Barr also recently stated, "There are regulatory gaps in the GENIUS law, and federal and state financial authorities must work together to address them," signaling growing concern within Congress.