A Risky Plan Dressed in Patriotism
The Senate’s vote today on the GENIUS Act carries high stakes. Senators Bill Hagerty and Tim Scott pitch it as a masterstroke to preserve the U.S. dollar’s global dominance by embracing private stablecoins. They frame it as a modern upgrade, swapping petrodollar power for digital supremacy. Yet, this plan raises a pressing question. Why entrust our financial future to unaccountable corporations instead of building a system that serves every American?
Stablecoins, digital tokens tied to the dollar and issued by private firms, promise swift, low-cost transactions. They seem like a natural evolution for a tech-driven world. But their shiny veneer hides serious flaws. Without rigorous federal oversight, these tokens invite fraud, instability, and inequality. The GENIUS Act’s haste to make them the cornerstone of our economy feels reckless, ignoring the hard lessons of financial history.
Advocates insist the bill secures America’s edge in a world where digital currencies, like China’s digital yuan, challenge the dollar’s reign. Their argument carries weight; global finance is shifting fast. But handing the keys to private companies won’t keep us ahead. A public solution, rooted in equity and accountability, offers a stronger path forward.
Consider the consequences of a misstep. The 2022 TerraUSD collapse erased $40 billion, shattering lives and exposing stablecoins’ fragility. The GENIUS Act, rather than addressing these risks, leans into a model that could amplify them. Why gamble with our economy when a safer alternative exists?
We face a defining choice. Will we build a financial system that concentrates power among tech giants, or one that prioritizes stability and inclusion? A central bank digital currency (CBDC), designed with the public in mind, answers this call far better than the GENIUS Act’s flawed vision.
Why a CBDC Serves the Public Good
A U.S. CBDC, issued by the Federal Reserve, promises stability and accessibility. Unlike stablecoins, which rely on public blockchains with uneven oversight, a CBDC would function as secure, programmable legal tender. It could simplify transactions, cut costs, and bring banking to the unbanked, all while embedding robust consumer protections and privacy safeguards.
Federal Reserve Vice Chair Lael Brainard champions a deliberate, five-year CBDC design process to balance innovation with equity. Her approach, echoed by Democratic lawmakers, views digital currency as a bridge to economic inclusion, not a playground for the wealthy. The GENIUS Act, by contrast, risks deepening divides, as only those with digital access or expertise can navigate its stablecoin-driven world.
Global evidence supports this view. Over 130 nations, covering 98 percent of global GDP, are studying CBDCs to boost efficiency and inclusion. Europe’s digital euro and the UK’s digital pound, though still in development, emphasize public oversight over private experimentation. The U.S. cannot afford to lag by clinging to a model prone to failure.
Supporters of the GENIUS Act argue stablecoins foster competition and freedom, warning a CBDC would centralize power. Their case falters under examination. Stablecoins, like Tether or USDC, are controlled by opaque firms with shaky reserve practices, not free-market paragons. A transparent CBDC, built with accountability, better aligns with the public’s needs.
Heeding History’s Lessons
Past financial crises offer clear warnings. The 2008 meltdown, fueled by lax oversight of complex instruments, devastated millions. Stablecoins, with their intricate reserves and blockchain reliance, pose comparable dangers. Senator Elizabeth Warren’s March 2025 critique of the GENIUS Act rightly demanded stronger protections, like barring officials from stablecoin ventures and tightening reserve rules.
The bill’s reserve requirements and anti-money-laundering measures sound promising but lack the rigor to prevent collapse or fraud. House Democrats’ STABLE Act, with its focus on insured issuers and liquid reserves, offered a more secure model. The GENIUS Act’s weaker standards, especially its reliance on state regulators for smaller issuers, invite inconsistency and exploitation.
Around the world, regulators are acting decisively. Europe’s MiCA framework, effective since mid-2024, sets strict liquidity and governance rules for stablecoins. Japan and Singapore have followed with robust oversight. The GENIUS Act’s lighter touch risks leaving the U.S. vulnerable in a global race for financial stability.
Choosing a Future for All
The GENIUS Act falls short of what America needs. A public digital dollar, designed with care and accountability, could transform payments, empower the underserved, and strengthen the dollar’s global role without jeopardling instability.
This debate isn’t about resisting progress; it’s about shaping it wisely. The Senate should reject the GENIUS Act and champion a CBDC that serves every citizen. Our financial system demands a vision that learns from the past and builds for the future.
What legacy will we leave? An economy driven by corporate interests, or one that uplifts everyone? The path is clear. Let’s demand a digital currency that reflects our values, securing the dollar’s future while putting people first.