On May 21, the U.S. Senate approved procedures to vote for the GENIUS Act, thanks to a few Democrats (Warner, Schiff, Gallego) who changed their views and voted for it. Republican Sen. Cyntia Lummis, one of the prominent backers of the bill, believes that the bill could be voted on and approved by May 26. The GENIUS Act proposes to authorize firms which issue stablecoins to use them to buy U.S. Treasury securities.
Sen. Elizabeth Warren (D-MA) gave a speech on the Senate floor comparing the attempt to deregulate the use of stablecoins to the deregulation of derivatives—which led to the 2008 financial crisis. While her attempt to keep Democrats united and to win over some Republicans to vote against the bill failed, likely due in part to starting with an argument about “Trump’s corruption,” Warren’s remarks have merit in describing the dangers faced by stablecoins.
“I am deeply concerned this bill will directly lead to the next financial meltdown,” she said. “This is not the first time Congress listened to the financial industry and created a weak regulatory regime for a new, innovative financial product. We’ve seen this story before, and we know how it ends.
“Twenty-five years ago, Congress passed the Commodities Futures Modernization Act to support the obscure financial derivatives market. Almost nobody noticed. At the time, derivatives were a relatively niche financial product. Most people didn’t really understand what they were or what they did, but when the derivatives industry came knocking, begging for so-called regulation, Congress was happy to oblige.
“After all, people said, surely some kind of regulatory framework was better than nothing. So Congress created a weak set of rules that was loaded with loopholes—just as the industry wanted. The result was a disaster: Derivatives moved from the edge of the financial system to the center of it. The result of that law was to massively expand the reach of the derivatives market and further integrate it into the core financial system. That bill helped set the stage for the 2008 financial crash. Congress came back after the meltdown and cleaned up the mess in Dodd-Frank—but that was long after ten million families lost their homes and millions more lost their jobs to Wall Street greed.”
EIR has similarly warned of the attempt to introduce “stablecoins” will only further destabilize global securities markets.May 23, 2025 (EIRNS)—On May 21, the U.S. Senate approved procedures to vote for the GENIUS Act, thanks to a few Democrats (Warner, Schiff, Gallego) who changed their views and voted for it. Republican Sen. Cyntia Lummis, one of the prominent backers of the bill, believes that the bill could be voted on and approved by May 26. The GENIUS Act proposes to authorize firms which issue stablecoins to use them to buy U.S. Treasury securities.
Sen. Elizabeth Warren (D-MA) gave a speech on the Senate floor comparing the attempt to deregulate the use of stablecoins to the deregulation of derivatives—which led to the 2008 financial crisis. While her attempt to keep Democrats united and to win over some Republicans to vote against the bill failed, likely due in part to starting with an argument about “Trump’s corruption,” Warren’s remarks have merit in describing the dangers faced by stablecoins.
“I am deeply concerned this bill will directly lead to the next financial meltdown,” she said. “This is not the first time Congress listened to the financial industry and created a weak regulatory regime for a new, innovative financial product. We’ve seen this story before, and we know how it ends.
“Twenty-five years ago, Congress passed the Commodities Futures Modernization Act to support the obscure financial derivatives market. Almost nobody noticed. At the time, derivatives were a relatively niche financial product. Most people didn’t really understand what they were or what they did, but when the derivatives industry came knocking, begging for so-called regulation, Congress was happy to oblige.
“After all, people said, surely some kind of regulatory framework was better than nothing. So Congress created a weak set of rules that was loaded with loopholes—just as the industry wanted. The result was a disaster: Derivatives moved from the edge of the financial system to the center of it. The result of that law was to massively expand the reach of the derivatives market and further integrate it into the core financial system. That bill helped set the stage for the 2008 financial crash. Congress came back after the meltdown and cleaned up the mess in Dodd-Frank—but that was long after ten million families lost their homes and millions more lost their jobs to Wall Street greed.”
EIR has similarly warned of the attempt to introduce “stablecoins” will only further destabilize global securities markets.May 23, 2025 (EIRNS)—On May 21, the U.S. Senate approved procedures to vote for the GENIUS Act, thanks to a few Democrats (Warner, Schiff, Gallego) who changed their views and voted for it. Republican Sen. Cyntia Lummis, one of the prominent backers of the bill, believes that the bill could be voted on and approved by May 26. The GENIUS Act proposes to authorize firms which issue stablecoins to use them to buy U.S. Treasury securities.
Sen. Elizabeth Warren (D-MA) gave a speech on the Senate floor comparing the attempt to deregulate the use of stablecoins to the deregulation of derivatives—which led to the 2008 financial crisis. While her attempt to keep Democrats united and to win over some Republicans to vote against the bill failed, likely due in part to starting with an argument about “Trump’s corruption,” Warren’s remarks have merit in describing the dangers faced by stablecoins.
“I am deeply concerned this bill will directly lead to the next financial meltdown,” she said. “This is not the first time Congress listened to the financial industry and created a weak regulatory regime for a new, innovative financial product. We’ve seen this story before, and we know how it ends.
“Twenty-five years ago, Congress passed the Commodities Futures Modernization Act to support the obscure financial derivatives market. Almost nobody noticed. At the time, derivatives were a relatively niche financial product. Most people didn’t really understand what they were or what they did, but when the derivatives industry came knocking, begging for so-called regulation, Congress was happy to oblige.
“After all, people said, surely some kind of regulatory framework was better than nothing. So Congress created a weak set of rules that was loaded with loopholes—just as the industry wanted. The result was a disaster: Derivatives moved from the edge of the financial system to the center of it. The result of that law was to massively expand the reach of the derivatives market and further integrate it into the core financial system. That bill helped set the stage for the 2008 financial crash. Congress came back after the meltdown and cleaned up the mess in Dodd-Frank—but that was long after ten million families lost their homes and millions more lost their jobs to Wall Street greed.”
EIR has similarly warned of the attempt to introduce “stablecoins” will only further destabilize global securities markets.
