4 hours ago
New York Attorney General Letitia James sounded the alarm connected the U.S. Senate’s stablecoin bill, informing Congress connected Monday that the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 (GENIUS) Act — astatine slightest arsenic it presently stands — “do[es] not incorporate the indispensable guardrails to support the American public.”
In an eight-page missive sent Monday, James urged Congress to dilatory down its efforts to walk stablecoin authorities and “take the clip indispensable to draught authorities that volition heighten innovation portion protecting our banking strategy that is the envy of the world.”
This is not James’ archetypal missive to Congress informing of the dangers of what she has called “the unchecked proliferation of integer assets.” In an April letter to 4 members of Congress, James asked that immoderate integer plus authorities included respective “common consciousness principles” including onshoring stablecoins and disallowing cryptocurrencies successful status accounts. In June, James submitted a statement to the House Financial Services Committee astir the House’s crypto marketplace operation bill, the Digital Asset Market Clarity Act (CLARITY), which she claimed “does not bash capable to support America’s interests, investors, and nationalist security.”
In her astir caller letter, James laid retired a projected overhaul of the bill, opening with regulating stablecoin issuers arsenic banks and “eliminating non-bank issuers” from the bill. She added that stablecoin issuers should beryllium required to beryllium domiciled successful the U.S., calling retired the GENIUS Act for “leav[ing] country for overseas issuers of U.S. dollar denominated and backed stablecoins to operate, fundamentally creating the ‘Tether loophole.’"
“The U.S. indispensable support power implicit dollar-pegged stablecoin issuers — particularly arsenic stablecoin issuance grows and their ownership of U.S. Treasuries becomes systemically important to the U.S. Treasury markets,” James wrote. “Congress should not hazard American markets being held hostage by foreign-domiciled stablecoin issuers.”
James besides suggested that stablecoin issuers beryllium required to place holders via “digital individuality credentials.”
“Without integer identity, the quality of instrumentality enforcement to halt parties from engaging successful sanctions evasion, violent and illicit financing, wealth laundering, and violations of the Foreign Corrupt Practices Act, the Lobbying Disclosure Act and different national and authorities anti-fraud statutes volition beryllium hobbled,” James wrote.
The Senate passed the GENIUS Act earlier this month. The House of Representatives has its ain stablecoin bill, the STABLE Act, sitting earlier it, though it could besides take to instrumentality up the Senate mentation as-is. Rep. French Hill, the House Financial Services Committee chair, has said connected aggregate occasions that the House and Senate mentation person important differences that request to beryllium ironed out, and it's unclear conscionable what the House volition bash arsenic of property time.
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