In the middle of a flood industry pressure In Washington, DC and the capitulation of Democrats, the Senate is on the point pass The Genius Act, a radical cryptocurrency law which could spread fraud, destabilizing digital currencies through the banking system. But legislators and consumer protection experts warn that the bill has an even more serious problem: this would allow Elon Musk and other major magnate technology to issue their own private currencies.
This means that we could soon live in a world where all online transactions will force us to pay for monopoly money made up of billionaires, for which technology giants will be able to charge exorbitant transaction costs.
This scenario is not only a pipe dream. This is a longtime project for technological platforms to control payment networks. In recent weeks, Meta has started to lay the foundations once again To launch his own cryptocurrency.
In addition, thanks to a bipartite “compromise” which convinced the retained democrats to support the legislation, the latest version of the bill could prevent the government’s best financial and technological regulator from supervising one of these potential technological currencies.
The law on engineering, which means guide and establish national innovation for the American floors, has been designed to create light regulations for stablescoins, a more commonly used cryptographic token which is often stored in an American dollar).
If it becomes a law, any banking or even non -banking company could obtain a license to transmit stablescoins with a minimum of surveillance. It could riddle The entire financial system with volatility and performs illicit activity such as fraud and undetectable terrorism while providing new major markets to companies that emit cryptocurrencies. The company based on El Salvador is currently biggest trading platform for these currencies and has face to face Many American lawsuits for fraud.
After a few convivial crypto democrats temporarily remote From their support for the bill earlier this month, the Republicans came to the negotiation table and did what seemed to be modest Concessions to temper the concerns of Democrats About the corrupt use of the crypto by Trump for personal purposes. But a legal analysis of democratic staff of the banking committee faded This new version of the invoice to allow Big Tech to create its own currencies, among a litany of other problems.
The bill also includes a giant sculpture to ensure that Musk X’s social media platform, formerly Twitter, would not be covered by even modest restrictions, “offering the analysis closest to the president.
Musk may not be the only one to mark these advantages. The Trump administration could also give up the strictest requirements of the bill for any privileged technological enterprise, according to the staff of the Senatoric Banking Committee.
In addition to these cuts, a new legal quote slippery In the bill, tacitly removes the authority of the Consumer Financial Protection Office (CFPB), a key financial and technological regulator, to supervise the issuance of Stablecoins. The CFPB has investigated Meta’s payment networks and other technological companies and has taken measures to regulate these platforms such as banks.
Despite these concerns, sixteen democratic senators vote in favor of moving the updated bill to a ground vote, which guarantees that its adoption through the Senate. Only two Republicans, Senator Rand Paul (R-Ky) and Senator Jerry Moran (R-KS), vote Against measurement, unhappy Federal intervention to help crypto and great technology.
According to the Democrats of the Senate Banking Committee, their colleagues have now granted a permit to the type of pure and simple salary to play that the Democrats had claimed to oppose the original version of the Engineering Act.
The technology giants who benefit from the bill channeled millions of dollars to the key candidates in the swing in the last elections. These include the Allies of Vocal Crypto Ruben Gallego (D-AZ) and Elissa Slotkin (D-Mi), who each received $ 10 million in political action committees funded by cryptocurrency interests. Progress PAC protection, the democratic branch of the Campto Lobby campaign expenditure operation, spent $ 33 million on primary and general electoral races in 2024.
The Genius Act is apparently intended to help cryptocurrency companies whose lobbying groups have pushed difficult for the bill. But Brian Shearer, former CFPB’s main advisor and legal expert at Vanderbilt University, maintains that the implications of legislation will be much more varied in non -banking industries.
The language of the bill erode A legal standard of two hundred hundred years which obliges a separation between banks which deal with financial products and commercial companies that sell goods. The division has been set up to prevent industrial companies from accumulating too much power in finance, allowing them to restrict competitors or consumers to access banking services.
In the past, the scrambling of the boundaries between finance and trade has caused major problems.
For example, in the financial sector, the 1999 Abroge From the Glass-Steagall Act under the former President Bill Clinton has eliminated a long-standing obstacle between the risky activities of the investment bank and the strongest side of the commercial bank, which takes care of the management of the accounts of the depositors. Financial experts cite The law fell as helping to open the way to a 2008 financial crash.
Although this result may seem extreme, the point, says Shearer, is that “even the minor disturbances of the fundamental principles of financial regulations can have these deep consequences to the whole financial system”. Regulators have warned of potential financial collapse if the crypto is authorized to infiltrate traditional banking markets.
The Engineering Act also occurs at a time when financial regulators, led by the CFPB, repressed Big Tech for having used its market power to force the adoption of users of its own payments treatment services, which are delivered with high transaction costs.
Apple, Google and Meta each run their own payment networks, and Musk previously noted His desire to integrate payment services into the social media platform of X.
Apple Pay has developed the most advanced online payment system, with almost eight hundred million world users. As part of a Ministry of Justice antitrustApple Stands accused Forcing users and developers to adopt its payment network.
Former CFPB lawyer Brian Shearer, explains that by virtue of the Apple Act, Apple could launch its own Stablecoin “payment card”, which would keep customer deposits and give the technology giant even greater access to financial and transaction data on its users.
Meta perhaps stated the most elaborate plans to issue her own currency. In 2019, the CEO of Mark Zuckerberg announcement The launch of the Meta crypto token, known as the balance, but fell due to the return of global and American regulations. Federal regulators, including the president of the Federal Reserve Jerome Powell, warned This lax surveillance on financial products like Balance could present a risk for the financial markets. For example, there is no deposit insurance cover for payments held on technological platforms.
Meta de la Balance’s announcement attracted the CFPB exam, which open A survey on the payment networks of large technologies. Following the survey, the agency published rules in 2024 holding technological payment services at the same regulatory standards As other financial institutions and application of fraud, privacy and other consumer protection laws to stablecoins.
Shortly after the rules were announced, Zuckerberg complain On the actions of the CFPB on The Joe Rogan experience Podcast and musk called so that the agency is closed.
Now the latest version of the Genius Act could eliminate the authority of the CFPB to apply these rules. Without the involvement of the CFPB, a patchwork of other less robust financial regulators would be left to monitor these potentially harmful practices.
While legislation is making its way through the Senate, reports have emerged that Mark Zuckerberg once again plans a company stable. A reason quoted For this decision would be to facilitate the payment of content creators abroad without dealing with bulky international banking procedures.
If the legislators adopt the law on engineering and allow Meta’s plans to move forward, the company could essentially become its own financial institution for an existing clientele of nearly four billion world users on its social media platforms.
“Big Tech wants to open its own banks, which they cannot do under existing banking regulations”, ” wrote Shearer on the site of financial policy Open banker. “We know it’s a real threat because Meta has already tried it and failed once before.”
