The US GENIUS Act & Stablecoins & the fear of corrupt actors, kleptocrats, and adversarial regimes

The GENIUS Act, which stands for Guiding and Establishing National Innovation for U.S. Stablecoins, is a bill to regulate stablecoins, a type of cryptocurrency pegged to a stable asset like the U.S. dollar.

The bill recently passed the Senate and is now headed to the House of Representatives for further consideration.

TRANSPARENCY INTERNATIONAL

1. Has raised concerns about the current form of the GENIUS Act, warning that it could potentially expose the U.S. financial system to misuse by corrupt actors, kleptocrats, and adversarial regimes.
2. They have recommended four key changes to the bill:
1. Expanding Anti-Money Laundering (AML) Requirements: This would ensure that stablecoin firms adhere to stringent AML protocols to prevent illicit activities.
2. Strengthening Sanctions Powers: This would give U.S. watchdogs more authority to impose sanctions on entities that violate regulations.
3. Enhancing Transparency and Reporting: This would require stablecoin issuers to provide more detailed and frequent reports on their reserves and transactions.
4. Implementing Robust Oversight Mechanisms: This would establish stronger oversight to monitor compliance and enforce regulations effectively.

Without these changes, Transparency International fears that the legislation could make the U.S. a haven for kleptocrats and criminals.

The proposed changes to the GENIUS Act could significantly impact cryptocurrency adoption in several ways:

1. Increased Trust and Confidence:
• Implication: By expanding AML requirements and enhancing transparency, the changes would likely increase trust in stablecoins among institutional and retail investors.
• This could lead to broader adoption as users feel more secure about the legitimacy and stability of these digital assets.
2. Greater Regulatory Clarity:
• Implication: Clearer regulations and stronger oversight mechanisms would provide a more predictable environment for businesses and investors. T
• This could encourage more companies to enter the stablecoin market, fostering innovation and competition.
3. Enhanced Market Stability:
• Implication: With stronger sanctions powers and robust oversight, the market could become more stable and less prone to manipulation or fraud.
• This stability could attract more users who are currently hesitant due to the perceived risks associated with cryptocurrencies.
4. Potential for Mainstream Use:
• Implication: Improved transparency and reporting requirements could make stablecoins more appealing for everyday transactions.
• This could lead to broader acceptance and use of stablecoins in various sectors, including e-commerce, remittances, and even traditional banking.
5. Global Competitiveness:
• Implication: By implementing these changes, the U.S. could position itself as a leader in the global cryptocurrency market.
• This could attract international businesses and investors, further boosting the adoption and integration of stablecoins into the global financial system.

These changes could create a more secure, transparent, and stable environment for stablecoins, potentially leading to increased adoption and integration into the U.S. and global financial systems.

Without these changes, Transparency International fears that the legislation could make the U.S. a haven for kleptocrats and criminals.

Source

• What the GENIUS Act could mean for crypto and other investors https://www.cnbc.com/2025/06/13/what-the-genius-act-could-mean-for-crypto-and-other-investors.html
• What to know about the GENIUS Act, a crypto regulation bill https://abcnews.go.com/Business/genius-act-crypto-regulation-bill/story?id=121981442
• US set for crypto overhaul, Senate passes Genius Act to regulate Stablecoins https://www.firstpost.com/world/us-set-for-crypto-overhaul-senate-passes-genius-act-to-regulate-stablecoins-13898567.html.