[Congressional Record Volume 171, Number 84 (Monday, May 19, 2025)]
[Senate]
[Pages S2962-S2963]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               GENIUS ACT

  Ms. WARREN. Mr. President, I rise today to talk about the GENIUS Act.
  Analysts expect that passing the GENIUS Act could grow the stablecoin 
market tenfold over just the next 3 years. That would take a $200 
billion market to a $2 trillion market, making it just a little bit 
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 our national security. Democrats also 
voted no because the bill failed to address President Trump's blatant 
crypto corruption.
  So here we are again. What has changed in the bill since the last 
vote? The answer: 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 fifth largest 
stablecoin in the entire 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 is 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 just 
cutting Trump in on the deal of this enormous financial transaction. 
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 U.S. 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 commonsense ethics 
provisions in this bill. Unfortunately, the final bill does nothing--
nothing--to rein in the President's crypto corruption. But some 
supporters say: Well, that is because the corruption is already 
happening, and at least this bill won't make it any worse.
  That is wrong. The GENIUS Act will accelerate Trump's corruption by 
supercharging the size of the stablecoin market and the reach and 
profitability of Trump's USD1. And, for the first time in American 
history, this bill will make 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 problem: financial stability.
  I am deeply concerned that this bill will directly lead to the next 
financial meltdown. This is not the first time that Congress has 
listened to the financial industry and created a weak regulatory regime 
for a new, innovative financial product. We have seen this story 
before, and we know how it ends.
  Twenty-five years ago, Congress passed the Commodity Futures 
Modernization Act to support the obscure financial derivatives market, 
and almost nobody noticed. At the time, derivatives were a relatively 
niche financial product. Most people really didn't understand what they 
were or what they did. But when the derivatives industry came knocking, 
begging for so-called regulation, Congress was willing 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 like the industry wanted. The result was a total 
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 10 million people lost their homes 
and millions more people lost their jobs and their savings.
  In the last decade, we saw this story in another version 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.
  Five years later--just 5 years later--three of those newly 
deregulated banks failed. Those three failures were the second, third, 
and fourth largest failures among banks 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

[[Page S2963]]

didn't face yet another financial meltdown just 2 years ago. Now here 
we are back to do the same thing again.
  A financial meltdown triggered by crypto instability is not some 
alarmist, fever dream. In fact, it nearly happened just a few years 
ago. Crypto markets abruptly lost $2 trillion--that is 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. It will be the American people who 
will bear the cost of a massive financial crash facilitated by the 
stablecoin market if Congress passes the GENIUS Act.
  Third problem: If this bill passes, it will mean easier access to 
money for terrorists and drug 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 percent of all illicit crypto transactions. There is a 
reason for this: These stablecoins are an ideal payment system that 
works 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.
  The bill 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 does not exist today and that 
didn't even exist in the bill until this past weekend.
  I don't want to see fentanyl traffickers or child pornographers or 
terrorists or countries that are trying to 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 is exactly where we 
are headed.
  Fourth problem: 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 community banks 
and from the communities they serve. There will be less funding 
available for small businesses and households all across the 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 if more community banks 
disappear.
  Finally, if this bill passes, mainstream investors will be at greater 
risk of getting robbed and scammed. The bill jeopardizes CFPB oversight 
and the suite of consumer protections that people enjoy when using 
their Venmo app or their bank account. If you get cheated using a 
stablecoin, you may just be out of luck.
  Our constituents will be reaching out to our offices because they 
have 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 will be no recourse.
  Congress should not choose to enable President Trump'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 engage 
in terrorist activities.
  It doesn't have to be this way. A bill that meaningfully strengthens 
oversight in 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.
  I yield the floor.
  The PRESIDING OFFICER (Mrs. MOODY). The Senator from Vermont.

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