Senator Warren’s Stablecoin Warning: Could Totally Destroy Our Financial System, No Biggie

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Oh, look, it’s Senator Elizabeth Warren, once again reminding us that everything is on the brink of total collapse. This time, she’s not worried about a rogue AI or your grandma’s WiFi – she’s worried about stablecoins. Yes, stablecoins. Those little digital assets that everyone keeps saying are “safe” because they’re pegged to the dollar. Safe, right?

Apparently, Warren is concerned that a bipartisan bill working its way through Congress is not doing enough to save us from financial oblivion. It’s called the GENIUS Act. (I mean, who named this thing? Was “Genius” the best they could do? No one in the room had a sarcastic suggestion?)

Introduced by Senator Bill Hagerty (R-TN), the bill aims to provide some “regulatory clarity” for stablecoins, which sounds great, except Warren’s not having it. On March 13th, the bill passed through the Senate Banking Committee with a pretty solid 18-6 vote, which is like Congress agreeing that an asteroid might hit Earth… but only if we have some rules about it first.

In a classic Warren moment, she told the committee earlier this month that the bill doesn’t do nearly enough to protect consumers, national security, or *checks notes* the entire global financial system. Simple stuff, really.

“This bill lacks the basic safeguards needed to keep stablecoins from blowing up our financial system. Under this bill, issuers can invest in risky assets, including the exact same ones we had to bail out in 2008 and 2020. Anyone who thinks taxpayers won’t be on the hook for this mess is living in a fantasy. Circle, the stablecoin giant, nearly imploded in 2023 until regulators decided to rescue its $3.3 billion at Silicon Valley Bank. This bill practically begs for another bailout,” Warren said, channeling every worried mom at a barbecue watching their kid play too close to the pool.

The bill would require stablecoin issuers to keep a 1:1 ratio of backing for their assets, which sounds fine in theory, like telling people not to drink and drive. But is that actually going to stop them? Eh, probably not.

The bill also specifies that these reserves could be made up of U.S. currency, deposits at insured banks, or, wait for it… Treasury bills, notes, or bonds. So, in case you were wondering, the stablecoins are backed by *more government stuff* – so everything’s totally fine, right?

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2025-03-26 15:02