Americans will “pay the price” for genius law

Sen. Elizabeth Warren (D-MA) condemned the recently passed genius law, saying that Americans “pay the price” for groundbreaking cryptography.

The law, signed into law by President Donald Trump earlier this month, provides legal clarity for stable ones. It established a framework for issuing and trading Stablecoins, spurring increased interest from banks and major retailers.

In an interview with Vanity FairWarren admitted that the US needs “strong cryptography,” but added that “jamming through an industry-designed bill is a mistake.”

“But if we ratify a drastic cryptocurrency framework, we need to get it right,” she said.

Warren went on to argue that crypto industry spending on lobbying “blew away what Washington saw before,” and that the industry is in a position to write “its own laws.”

The senator recalls the accumulation of the 2008 financial crisis and sought to provide historical similarities to the genius law.

“We’ve seen the film before when the industry writes its own laws,” she said this time, referring to the traditional banking industry.

Warren compared the Genius Law to the Commodity Futures Modernization Act of 2000. This is a bill that means that over-the-counter (OTC) derivatives are rarely regulated in the US. Many analysts and commentators consider OTC derivatives to be major contributors to the 2008 financial crisis, including credit default swaps based on US mortgages.

“It was 2000. The derivatives industry (a small, outer esoteric group of financial products of this kind) was similar to Washington, saying, “Here’s the bill, regulate us,” giving lawmakers a weaker regulation of the industry and the emergence of US government support. ”

Warren said the US government “when they work for an industry like this, a few people get really rich and Americans pay the price.”

Some of Warren’s concerns reflect the concerns of economics professor Sergi Basco, who teaches at the University of Barcelona and has recently shared opinions on genius behavior. conversation.

“One of the concerns I raised in the notes conversation It’s very similar to what I think is behind Elizabeth Warren’s comments,” he said. Decryption. “By enacting the law, we give Stablecoins a safety estimate.”

He reasoned that if people saw “good companies” issuing “good companies”, they might assume that all stubcoins are issued by companies with equally good reputations.

“It is also not clear that private stubcoin issuers will be adequately regulated to avoid potential bank operations,” he said. “In principle, digital tokens are backed by the US Treasury Department (or similar). However, the value of the US Treasury Department fluctuates and having secure assets is not a guarantee that excludes bank execution, as SVB shows.”

He was referring to Silicon Valley Bank, which was closed in May 2023 during banking. The FDIC had to step in to allow depositors to withdraw money.

Sen. Warren, a long-time critic of the crypto industry, has repeatedly criticized Trump’s Memocoin advance into the world. among them Vanity Fair In the interview, Warren also criticized Trump’s decision to dissolve the Justice Department’s crypto enforcement division, claiming he called on the SEC to “retreat code enforcement.”

The senator has spoken out in the past about how she believes stubcoin could ultimately be abused by large corporations. In a shared statement Decryption Earlier this month, Warren said, “billionaires like Elon Musk, Jeff Bezos and Mark Zuckerberg were able to launch stubcoins that track purchases, misuse data and squeeze out their competitors.”