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Floor Speech

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Mr. REED. Mr. President, I rise today to discuss S. 1582, the so- called GENIUS Act.

Several weeks ago, when the majority leader said we would have votes on amendments, I took him seriously, and I was one of the first to file. And we could have been voting on amendments--my amendments, those of my colleagues--at any time in the last few weeks, but that hasn't happened.

That is regrettable because the GENIUS Act, as it is currently drafted, is, I believe, fundamentally flawed. The GENIUS Act exposes taxpayers, consumers, and the financial system to unacceptable risk and creates venues for criminals, terrorists, and rogue governments to finance their illicit activities.

Among other things, this bill places the U.S. Government stamp of approval on Tether, the world's largest stablecoin, which is based in El Salvador and favored by North Korea, Russian arms dealers, ransomware attackers, the Iranian military, the drug cartels, and so many other criminal organizations.

The GENIUS Act takes already weak State laws and makes them weaker and applies them nationwide, making it possible for stablecoin companies to operate with near-zero capital and unable to withstand a financial crisis. It is possible for stablecoin companies to avoid getting an audit. It is impossible for the government to revoke a stablecoin company's charter, even if it turns out to be a Ponzi scheme or if an executive dips into customer funds.

The GENIUS Act buys into the belief that the billionaires running the industry know what they are doing and that the marriage of complex financial products and complex technology simply can't fail. The one thing the billionaires do know how to do is protect their interests.

But, not surprisingly, this bill leaves open the door to bailouts, which we have seen time and time again for other lightly regulated nonbanks that got into trouble, like Fannie Mae, Freddie Mac, AIG, and Bear Stearns.

When there is a run on a stablecoin--and there very likely will be a run one day--the industry will turn to the American taxpayer for a bailout, and the GENIUS Act paves the way for that to happen with no limits on the Federal Reserve's authority to prop up the industry.

Finally, this bill perpetuates Donald Trump's naked corruption. It actually green-lights the name of Trump's stablecoin, USD1, and it allows Trump's handpicked regulators to write the rules of the road governing his most recent business venture.

We need to provide real guardrails that will protect consumers, real tools for our national security Agencies to address this new technology, and real authority for regulators to intervene in a crisis--real guardrails and real tools, not words on a page that give only the aura of regulation and protection with no teeth.

My amendments and those offered by colleagues on both sides of the aisle would provide these tools and authorities. However, it appears that we won't have the opportunity to consider a single one of them and improve this legislation. Because of that, I would urge my colleagues to oppose this bill.

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