U.S. Senator Warren Opposes GENIUS Act Over Trump’s USD1 Stablecoin Connections

TLDR Senator Elizabeth Warren has withdrawn support for the GENIUS Act over Trump-backed USD1 stablecoin Warren called the $2 billion UAE-MGX deal with USD1 “shady” and potentially corrupt The USD1 stablecoin has surged to become the 7th largest in the world 10 US senators have now withdrawn support for the bill citing security concerns World Liberty Financial (WLFI), co-founded by Eric Trump, is delaying exchange listings pending regulatory clarity The GENIUS Act, a piece of legislation designed to regulate stablecoins in the United States, is facing strong opposition from Senator Elizabeth Warren and other lawmakers due to concerns over President Donald Trump’s connections to the USD1 stablecoin. This growing controversy highlights the complex intersection of politics, cryptocurrency, and financial regulation in the United States. Senator Warren has publicly urged the Senate to reject the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. Her opposition centers on potential conflicts of interest related to the Trump-backed World Liberty Financial (WLFI) and its USD1 stablecoin. The USD1 stablecoin, backed by short-term U.S. Treasuries, was co-founded by President Trump’s son Eric Trump and crypto investor Zach Witkoff. It has quickly risen to become the seventh largest stablecoin globally, according to market data. Warren’s concerns escalated following a deal between WLFI and UAE-based MGX. The arrangement involves using USD1 as the settlement currency for MGX’s $2 billion investment into Binance, the global cryptocurrency exchange. “The Trump family stablecoin surged to 7th largest in the world because of a shady crypto deal with the United Arab Emirates—a foreign government that will give them a crazy amount of money,” Warren stated on social media. She added, “The Senate shouldn’t pass a crypto bill this week to facilitate this kind of corruption.” Political Divide Deepens The GENIUS Act initially enjoyed bipartisan support in Congress. However, the landscape has shifted dramatically with at least ten senators now withdrawing their backing for the legislation. These lawmakers cite various concerns, including what they perceive as insufficient anti-money laundering protections and national security safeguards. The bill, sponsored by Senator Bill Hagerty, passed the Senate Banking Committee in March but now faces an uncertain future. Warren attempted to amend the bill to prohibit stablecoins used in criminal activities and impose stricter oversight on foreign firms. Her proposals were defeated, prompting her to warn that “every senator must vote no—or risk aiding and abetting Trump’s corruption.” When questioned about potential personal gain from crypto legislation, President Trump responded, “I haven’t even looked,” adding, “If I own stock in something and I do a good job and the stock market goes up, I guess I’m profiting.” Market Implications The political turmoil surrounding the GENIUS Act has real-world consequences for WLFI and its USD1 stablecoin. The company has reportedly paused plans for centralized exchange listings, waiting for regulatory clarity before proceeding. This delay may impact USD1’s competitive position against established players like Tether in the $245 billion global stablecoin market. Most tokens in this space are backed by short-term U.S. Treasuries and other real-world debt instruments. The Trump administration had previously expressed optimism about the GENIUS Act’s passage. According to David Sacks, the bill was expected to receive final approval in May, but enthusiasm has diminished as opposition has grown. Warren has framed the issue as a broader concern about presidential ethics. “This is a bill that would make it even easier for the president and his family to profit off their own stablecoin and oversee their own financial company,” she stated last week. President Trump has defended his crypto initiatives as necessary for American competitiveness, saying, “If we don’t do it, China’s going to,” and claiming millions of Americans support these efforts despite opposition from the previous administration. The developing situation underscores the challenges of creating regulatory frameworks for emerging technologies like cryptocurrency when political and financial interests intersect. The GENIUS Act’s fate remains uncertain as it heads toward a potential floor vote in the coming days. Source: https://blockonomi.com/u-s-senator-warren-opposes-genius-act-over-trumps-usd1-stablecoin-connections/