Opinion: Genius Act Safeguards Stablecoin Holders' Priority, U.S. Banks May Foot the Bill

On July 12th, as per DL News, the passage of the Genius Act in the U.S. Senate is attracting the attention of the banking and legal sectors. This bill, which gives stablecoin holders priority claim to their reserve assets in the event of bankruptcy, may pose risks to traditional banks and other customers. Georgetown Law professor Adam Levitin cautioned that this arrangement is essentially "subsidizing stablecoin issuance at the expense of bank deposits," which could harm the interests of ordinary bank customers, especially when the stablecoin issuer or its custodial bank goes bankrupt. The current version of the bill stipulates that stablecoins must be backed by highly liquid assets (such as U.S. Treasury bonds), the issuer must disclose reserve status on a monthly basis, and have the ability to freeze tokens. If passed, banks and other entities will be able to issue compliant stablecoins. The bill is currently awaiting review by the U.S. House of Representatives. While aiming to enhance user confidence and strengthen the integration of stablecoins with the traditional financial system, the design of its bankruptcy priority has also sparked discussions on regulatory logic, financial stability, and potential bank interest allocation. Some industry insiders have expressed that the bill could be a turning point for stablecoin development, while also intensifying concerns about the impact on the traditional financial system.