The GENIUS Act proposes a framework for banks and private companies to issue stablecoins without mandatory dollar-pegging. Critics warn this could allow technology companies to link stablecoins to riskier assets, jeopardizing financial stability. The legislation raises consumer protection concerns, as notable tech firms like Amazon and PayPal show interest in entering the stablecoin market. Current provisions lack essential safeguards such as clear dispute resolution, deposit insurance, and liability limitations for unauthorized transactions, leaving American consumers exposed to potential financial loss from scams.
The GENIUS Act creates a framework for banks and private companies to issue stablecoins, potentially allowing large tech companies to peg their coins to riskier assets.
Critics highlight that the law's alleged flaws could make both cryptocurrency tokens and the global financial system less stable, raising serious concerns.
Consumer Reports warns of 'insufficient consumer protections' under the GENIUS Act, which could leave Americans vulnerable during financial transactions.
Major companies like Amazon, Meta, and PayPal are interested in issuing stablecoins but will not have to provide necessary consumer protections.
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