The recent GENIUS stablecoin bill is merely a thinly veiled attempt to usher in central bank digital currency (CBDC) controls through privatized means, according to Jean Rausis, co-founder of the Smardex decentralized trading platform.
In a statement shared with Cointelegraph, Rausis said that the US government will punish stablecoin issuers that do not comply with the new regulatory framework, similar to the European Union Markets in Crypto-Assets (MiCA) regulations. The executive added:
“The government realizes that if they control stablecoins, they control financial transactions. Working with centralized stablecoin issuers means they can freeze funds anytime they want — essentially what a CBDC would allow. So, why bother creating a CBDC?”
“With stablecoins under the government’s control, the result is the same, with the false veneer of decentralization added as a bonus,” the executive continued.
Decentralized alternatives to centralized stablecoins, such as algorithmic stablecoins and synthetic dollars, will prove to be a valuable bulwark against this creeping government control over crypto, Rausis concluded.
First page of the GENIUS Act. Source: United States Senate
Related: America must back pro-stablecoin laws, reject CBDCs — US Rep. Emmer
Revamped GENIUS bill to include stricter provisions
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, introduced by Tennessee Senator Bill Hagerty on Feb. 4, proposed a comprehensive framework for overcollateralized stablecoins such as Tether’s USDt (USDT) and Circle’s USDC (USDC).
The bill was revamped to include stricter Anti-Money Laundering, reserve requirements, liquidity provisions and sanctions checks on March 13.
These additional provisions will presumably give US-based stablecoin issuers an edge over their offshore counterparts.
During the recent White House Crypto Summit, US Treasury Secretary Scott Bessent said the US would use stablecoins to ensure US dollar hegemony in payments and protect its role as the global reserve currency.
Largest holders of US government debt. Source: Peter Ryan
Centralized stablecoin issuers rely on US bank deposits and short-term cash equivalents such as US Treasury bills to back their digital fiat tokens, which drives up demand for the US dollar and US debt instruments.
Stablecoin issuers collectively hold over $120 billion in US debt — making them the 18th-largest buyer of US government debt in the world.
Magazine: Bitcoin payments are being undermined by centralized stablecoins
