WASHINGTON, D.C.—Phillip Basil, Director of Economic Growth and Financial Stability, issued the following statement in connection with Better Markets new Fact Sheet, “The Crypto Stablecoin GENIUS Act Hurts All Americans by Undermining the Economy, Financial System, and Monetary Policy”:
“The crypto stablecoin GENIUS Act that was signed into law last month is a big win for the crypto industry and its arm of lobbyists, making them rich while hurting Main Street Americans by undermining the economy, financial system, and monetary policy. That’s because the Act is full of industry-friendly provisions, loopholes, ambiguities, and careful phrasing that are designed to give the appearance but not the reality of meaningful federal regulation. This law does nothing to change the fact that stablecoins, and crypto generally, are nothing more than novel, very high risk, volatile financial investments that will amplify already substantial financial stability risks and weaken economic growth and the effectiveness of monetary policy.
“That is what is really at stake here. Stablecoins make worse the type of financial instability that has been repeatedly inflicted on the American people by the financial industry – in the 2008 Financial Crisis, 2019 turmoil in markets for repurchase agreements, March 2020 financial market turmoil, and 2023 banking crisis. Furthermore, in large part due to the loophole that allows interest to be paid on stablecoins, they will undermine the real economy by drawing deposits away from our banking system and decreasing the type of long-term lending that especially benefits small businesses and households.
“The GENIUS Act is a reckless piece of legislation that is nothing more than a giveaway to the crypto industry. Ultimately, the growth of stablecoins as a result of this legislation will hurt all Americans, and the public will bear these tremendous costs while the industry will get rich moving billions of dollars from Americans’ pockets to their bonus pools.”
The fact sheet is available online here.
###
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
