Crypto Industry Gets Its Way on GENIUS Act Rulemaking

[Celerity]

The primary federal regulators of stablecoins are finalizing their rules for GENIUS Act implementation and, much to the chagrin of the banking industry, crypto firms are getting everything they want.

https://prospect.org/2026/06/24/crypto-industry-gets-its-way-on-genius-act-rulemaking/


Credit: Hammad Khan/iStock

It has been almost one year since the passage of the crypto industry’s crowning legislative achievement thus far, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which means that the deadline set by Congress for federal regulators to submit their rules for implementation is rapidly approaching. Proponents of the GENIUS Act argue that it will provide a comprehensive regulatory framework for stablecoins, protecting consumers and investors. But criticism continues to pour in from a group of unlikely bedfellows, namely, several prominent progressive lawmakers and banking industry groups worried about the dangers shaky stablecoin regulation poses to the traditional financial system. The pushback from the banking sector on crypto-friendly GENIUS implementation is just one battle in a larger war the two industries are currently waging in the halls of the federal government. Wall Street may be holding its own in Congress—the Clarity Act, another industry-backed crypto bill drawing major ire from the banks, is currently stalled in the Senate ahead of a potentially fatal August recess—but the GENIUS Act proposals suggest crypto may be pulling ahead in the fight to control major financial regulatory agencies.

Unlike other cryptocurrencies, stablecoins are pegged to a traditional marker of value, almost always the U.S. dollar, and supposedly backed by real assets like cash, stocks, real estate, etc. The promise to customers is that they will get their money back if they want to get rid of their stablecoin. Much like a pre–New Deal bank, stablecoins are inherently vulnerable to a run. If the underlying asset suffers some bad news, customers are liable to panic and try to cash in their stablecoins all at the same time, forcing a fire sale at discount prices. But stablecoins also come with risks those banks did not. Since they act as a sort of middleman between crypto and the rest of the world, if there’s a panic in the crypto markets—which happens all the time—customers may want out of their stablecoin accounts too, and more panic ensues. Either way—if there’s worry in the underlying assets or in the crypto world—nothing can stop a run and prevent customers from losing money.

Sure enough, virtually every major stablecoin has lost its peg on multiple occasions. In 2022, TerraUSD, then the third-largest stablecoin, collapsed entirely when its “algorithmic” peg system, designed to get around the need for real assets with computer trickery, turned out to be a recipe for hyperinflation at the first sign of trouble. The GENIUS Act does at least exclude similar algorithmic coins from the definition of a “payment stablecoin,” but even bona fide fiat-backed stablecoins are often stumbled. The largest stablecoin, Tether, saw its value fall after the Terra crash and has further wobbled over questions around its books, which turned out to include a lot of risky bets on Chinese real estate. The FDIC had to step in to save Circle after the 2023 collapse of Silicon Valley Bank, where the stablecoin held $3.3 billion in reserve assets. “Stablecoin, despite their name, haven’t proven to be all that stable,” explains Mark Hays, the associate director for cryptocurrency and financial technology at Americans for Financial Reform. Even so—thanks in large part to the passage of the GENIUS Act and President Trump’s crusade to legitimize crypto—stablecoin’s presence in the financial world exploded over the past year, bringing all of its volatility along with it.

Now, as the Clarity Act, another industry-backed crypto bill, bobs and weaves its way through the Senate, federal agencies have a chance to address some of the risks associated with the weak regulatory scheme in the GENIUS Act. “Those rulemakings in a normal world would be an opportunity to fix or strengthen those measures or maybe close some gaps,” explains Hays. But rules proposed by regulators like the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) would do the opposite. “We’re seeing an enabling of the industry’s wish list when it comes to how they want to balance these scales,” Hays told the Prospect. Leading the charge is Jonathan Gould, Trump’s comptroller of the currency, whose office will be one of the main regulators of stablecoins and who worked as the chief legal officer at a blockchain firm during the Biden administration. Gould has already ushered through a number of preliminary trust bank charters for stablecoin issuers like Crypto.com, Ripple, and Circle after passage of the GENIUS Act, which establishes trust banks chartering as one of several pathways to become a permitted payment stablecoin issuer (PPSI). The Trump family’s crypto firm, World Liberty Financial, also applied for a trust bank charter in January. Gould is expected to announce his decision soon, which two anonymous OCC staffers told NOTUS last week is all but guaranteed to go in the president’s favor.

snip




Fri Jul 18, 2025, 10:36 PM

https://www.democraticunderground.com/100220495075

The 18 Dem Senate Yeas are below as well

https://clerk.house.gov/Votes/2025200

Aguilar Democratic California Yea
Amo Democratic Rhode Island Yea
Bell Democratic Missouri Yea
Bera Democratic California Yea
Boyle (PA) Democratic Pennsylvania Yea
Brownley Democratic California Yea
Budzinski Democratic Illinois Yea
Bynum Democratic Oregon Yea
Carbajal Democratic California Yea
Cherfilus-McCormick Democratic Florida Yea
Clark (MA) Democratic Massachusetts Yea
Conaway Democratic New Jersey Yea
Correa Democratic California Yea
Costa Democratic California Yea
Craig Democratic Minnesota Yea
Crockett Democratic Texas Yea
Cuellar Democratic Texas Yea
Davis (NC) Democratic North Carolina Yea
DelBene Democratic Washington Yea
Espaillat Democratic New York Yea
Fields Democratic Louisiana Yea
Figures Democratic Alabama Yea
Frankel, Lois Democratic Florida Yea
Garcia (CA) Democratic California Yea
Gillen Democratic New York Yea
Golden (ME) Democratic Maine Yea
Goldman (NY) Democratic New York Yea
Gomez Democratic California Yea
Gonzalez, V. Democratic Texas Yea
Goodlander Democratic New Hampshire Yea
Gottheimer Democratic New Jersey Yea
Gray Democratic California Yea
Harder (CA) Democratic California Yea
Himes Democratic Connecticut Yea
Horsford Democratic Nevada Yea
Houlahan Democratic Pennsylvania Yea
Jackson (IL) Democratic Illinois Yea
Jeffries Democratic New York Yea
Johnson (TX) Democratic Texas Yea
Kamlager-Dove Democratic California Yea
Kelly (IL) Democratic Illinois Yea
Kennedy (NY) Democratic New York Yea
Khanna Democratic California Yea
Krishnamoorthi Democratic Illinois Yea
Landsman Democratic Ohio Yea
Larsen (WA) Democratic Washington Yea
Latimer Democratic New York Yea
Lee (NV) Democratic Nevada Yea
Levin Democratic California Yea
Liccardo Democratic California Yea
Lieu Democratic California Yea
Lofgren Democratic California Yea
Magaziner Democratic Rhode Island Yea
Mannion Democratic New York Yea
Matsui Democratic California Yea
McBath Democratic Georgia Yea
McClain Delaney Democratic Maryland Yea
McDonald Rivet Democratic Michigan Yea
McGarvey Democratic Kentucky Yea
Meeks Democratic New York Yea
Menendez Democratic New Jersey Yea
Meng Democratic New York Yea
Min Democratic California Yea
Moskowitz Democratic Florida Yea
Moulton Democratic Massachusetts Yea
Olszewski Democratic Maryland Yea
Panetta Democratic California Yea
Pappas Democratic New Hampshire Yea
Pelosi Democratic California Yea
Perez Democratic Washington Yea
Peters Democratic California Yea
Pettersen Democratic Colorado Yea
Pou Democratic New Jersey Yea
Quigley Democratic Illinois Yea
Riley (NY) Democratic New York Yea
Ruiz Democratic California Yea
Ryan Democratic New York Yea
Schneider Democratic Illinois Yea
Scholten Democratic Michigan Yea
Schrier Democratic Washington Yea
Sewell Democratic Alabama Yea
Sherrill Democratic New Jersey Yea
Sorensen Democratic Illinois Yea
Soto Democratic Florida Yea
Stanton Democratic Arizona Yea
Stevens Democratic Michigan Yea
Strickland Democratic Washington Yea
Subramanyam Democratic Virginia Yea
Suozzi Democratic New York Yea
Swalwell Democratic California Yea
Sykes Democratic Ohio Yea
Thanedar Democratic Michigan Yea
Thompson (CA) Democratic California Yea
Titus Democratic Nevada Yea
Torres (NY) Democratic New York Yea
Trahan Democratic Massachusetts Yea
Tran Democratic California Yea
Vasquez Democratic New Mexico Yea
Veasey Democratic Texas Yea
Vindman Democratic Virginia Yea
Wasserman Schultz Democratic Florida Yea
Whitesides Democratic California Yea

the 18 Dem Senator Yeas

https://www.senate.gov/legislative/LIS/roll_call_votes/vote1191/vote_119_1_00318.htm#position

YEAs

Alsobrooks (D-MD)
Booker (D-NJ)
Cortez Masto (D-NV)
Fetterman (D-PA)
Gallego (D-AZ)
Gillibrand (D-NY)
Hassan (D-NH)
Heinrich (D-NM)
Hickenlooper (D-CO)
Kim (D-NJ)
Lujan (D-NM)
Ossoff (D-GA)
Padilla (D-CA)
Rosen (D-NV)
Schiff (D-CA)
Slotkin (D-MI)
Warner (D-VA)
Warnock (D-GA)




https://www.cbsnews.com/news/trump-signs-genius-act-crypto-bill/

[Fiendish Thingy]

1. The best representation money can buy

Gallego alone took $10 million from the cryptobros.

I wonder how much the others got for their votes?

And that doesn’t include donations from the AI data Center builders.

[in2herbs]

2. I live in AZ and do not intend to vote to re-elect Gallego --- ever! nt

[Fiendish Thingy]

3. Surely there must be a good progressive who could primary him. Nt

[Sympthsical]

4. LOL, California

Guys. Pretend tech doesn't have you in their pocket. Just for the look of the thing.