Genius Act grants stablecoin holders bankruptcy priority or exacerbates banking system risks

Odaily Planet Daily News: The Genius Act passed by the US Senate is attracting attention from the financial and legal communities. The bill grants stablecoin holders priority claims over their backed assets in the event of bankruptcy, which is believed to have a potential adverse impact on traditional bank customers. Adam Levitin, a law professor at Georgetown University, pointed out that such arrangements are essentially "subsidizing stablecoin issuance at the cost of bank deposits," especially when the stablecoin issuer or its custodian bank goes bankrupt, which may erode the rights of ordinary depositors. The current draft bill requires stablecoins to be supported by highly liquid assets (such as US Treasury bonds), issuers to disclose their reserves on a monthly basis, and have the ability to freeze tokens. If approved, banks and other institutions will be able to issue compliant stablecoins. Although the bill aims to boost user confidence and strengthen the connection between stablecoins and the real financial system, its bankruptcy priority arrangement has also sparked discussions on regulatory logic and financial stability. Some analysts believe that this bill may become a key node in the development of stablecoins, while exacerbating the structural impact on the traditional financial system. （DL News）