President Trump’s Cryptocratic Controversy
House Democrats moved down the hall for their own “shadow hearing” in hopes of leaving the cryptocurrency law hearing and focusing on President Trump’s close ties with the crypto industry. They claim he is engaged in a massive corruption.
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Wild West Days, the cryptocurrency market, could be coming to an end as Congress approaches passing the first legislation.
The Genius Act officially guided and established national innovation for the US Stablecoins Act, passing an important procedural hurdle in the Senate on May 19th. The bill creates a regulatory framework for Stablecoins, a kind of cryptocurrency tied to the value of assets like the US dollar.
The bill is controversial and remains far from its final passage. Voting will not occur until after the end of the month’s anniversary.
Still, the bill is seen as a major victory for the crypto industry. The industry collateral bill will help set industry standards that protect consumers and allow stubcoin to become mainstream for digital payments and other financial products, proponents say.
The bill is “a type of policy proposal that could lead to frictionless payments and help millions of Americans increase access to the financial system,” said Austin Jensen, vice president of government affairs for the Association of Retail Leaders Associations.
The bill also “strengthens US leadership in digital assets,” said Sarah Mirby, interim CEO and policy director of the Blockchain Association.
What is Stablecoin?
Stablecoin is a kind of cryptocurrency designed to maintain a stable value compared to assets like the US dollar.
By locking the unit into a stable asset, it minimizes price fluctuations, making it suitable for everyday trading and storage of reliable value. And many silly things are supported by reserves in Fiat currency or other assets, such as the US Treasury.
What is a genius act?
The bill establishes rules for Stablecoin issuers, including:
- Companies need to maintain reserves for the assets underlying Stablecoin so that consumers can easily acquire holds at any time.
- Issuers must prioritize Stablecoin holders for repayment in the event of bankruptcy.
- Issuers must comply with some anti-money laundering rules and counter-terrorism sanctions.
The bill also prohibits “either Congress or senior enforcement department officials from issuing silly products of payment during the period of public service.”
What do critics say about genius?
Critics say the bill won’t go enough to protect consumers or stop President Donald Trump from lining up in his own pocket. Trump-linked crypto venture World Liberty Financial has launched USD1, a US dollar-backed Stablecoin.
“The Genius Act accelerates Trump corruption by surpassing the size of the stubcoin market, the scope and profitability of USD1,” said Sen. Elizabeth Warren (D. Massachusetts), one of the bill’s most vocal critics, in the Senate on May 19.
USD1, released in March, is already the fifth largest stub coin in the world.
“As this bill passes, it means more anonymous buyers, large corporations and foreign governments can expect more anonymous buyers, large corporations and foreign governments, both as shadow bank accounts protected from government surveillance and as a way to personally repay the president,” Warren said. “For a con man, it’s two-on-one.”
She also warned about another financial crisis earlier, saying that Americans “if Congress passes this bill, they will bear the costs of a massive financial crash that will be promoted by the Stablecoin market.”
“This weak bill is worse than having no bills at all,” Warren said.
Medora Lee is a money, market and personal finance reporter for USA Today. mjlee@usatoday.com and Subscribe to our free daily money newsletter Personal finance tips and business news every Monday to Friday.
