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The Genius Act gives stablecoin holders bankruptcy priority, which may increase the risk of the banking system
Odaily News The Genius Act passed by the U.S. Senate gives stablecoin holders priority claims on their backing assets when the issuer goes bankrupt, which has attracted the attention of the banking and legal circles. Adam Levitin, a law professor at Georgetown University, pointed out that this mechanism may lead to subsidizing the issuance of stablecoins at the expense of bank deposits, which will harm the interests of traditional bank customers, especially when the issuer or custodian bank goes bankrupt.
The bill also stipulates that stablecoins must be backed by highly liquid assets (such as U.S. Treasury bonds), issuers must disclose reserves monthly, and have the ability to freeze tokens. If passed, banks and other entities will be able to legally issue compliant stablecoins.
Industry insiders believe that although the bill is intended to enhance user confidence and strengthen the integration of stablecoins and traditional finance, the arrangement of bankruptcy priority may disrupt the risk structure of the original financial system and become an important turning point in the development and regulatory coordination of stablecoins. (DL News)
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