For Immediate Release: February 26, 2025
CONTACT:
Jarice Thompson
jarice@ourfinancialsecurity.org
More than 20 organizations Oppose Pro-Crypto Industry Stablecoin Bills
Groups warn bills pave the way for Elon Musk, Big Tech firms to Issue Private Digital Currencies that pose risks to investors and economy
Washington, D.C – In a letter sent to Congress today, more than 20 state and national groups raised alarms over two bills — the STABLE Act in the House and the GENIUS Act in the Senate — that attempt to create a new regulatory framework for so-called stablecoins. The letter arrives as the Senate Banking Committee’s Subcommittee on Digital Assets holds a hearing today to discuss this and other crypto industry-driven policy proposals.
Stablecoins are crypto assets meant to serve as a less volatile vehicle for crypto trading and eventually payments. In truth, they are often far from stable, and normalizing stablecoins as part of mainstream finance without robust oversight could cause widespread financial harm to investors and the economy.
“The picture is clear: these bills are nothing but a crypto industry wish list, not an adequate regulatory regime that provides necessary oversight, customer protection, and stability,” said Mark Hays, associate director for cryptocurrency and financial technology with Americans for Financial Reform. “And, the shortcomings of these legislative efforts are compounded by Elon Musk and the Administration’s collaboration with the crypto industry to eviscerate the ability of federal regulators to provide adequate oversight and consumer protection.”
The letter identifies a litany of concerns with the bills, from the absence of adequate consumer protections, the inadequate state regulatory provisions and lack of federal oversight, as well as flawed rules for reserve assets, bankruptcy, custody and more. But, the chief concern the letter raises is that the bills allow large non-financial firms, whether Big Tech firms like X or Amazon, or commercial firms like Wal-Mart, to become stablecoin issuers without restrictions or adequate oversight.
The letter states: “Large firms (such as Amazon) already have an outsized influence over markets and the economy. Enabling those same firms to collect consumers’ transactions and sensitive personal financial data as well as control access to customers’ assets or their purchase of consumer products raises huge risks and is a throwback to the company scrips of the Robber Baron Age. Additionally, if one of these firms faced economic hardship or collapsed, the financial distress could precipitate economy-wide financial harm.”
“Right now these bills give a green light to Musk and other tech billionaires to effectively create and control what amount to private currencies on their platforms, with minimal oversight. In 2019, there was bipartisan opposition to similar proposals by Meta; where are the Members of Congress willing to oppose such dangerous proposals today?” Hays added.
The groups called on members of Congress to oppose these bills as introduced and to pursue more robust and effective oversight measures for stablecoin issuers and their users. As the letter states: “Consumers, investors and financial markets using stablecoins need safeguards that are comparable to those found in traditional finance, and that adequately address both the conventional and the novel risks associated with these crypto assets. These bills accelerate the convergence of Big Tech and Big Finance, dangerously commingling banking and commerce, and are a necessary prerequisite for future giveaways to the crypto industry.”
Current signatories to the letter include: American Economic Liberties Project, Americans for Financial Reform, Better Markets, Center for Economic Justice, Center for Responsible Lending, Consumer Federation of America, Consumer Federation of California, Consumer Reports, Demand Progress, Georgia Watch, National Community Reinvestment Coalition, National Consumer Law Center, on behalf of its low-income clients, New Jersey Citizen Action, New Jersey Appleseed Public Interest Law Center, New Yorkers for Responsible Lending, Oregon Consumer League, Public Citizen, RAISE Texas, RISE Economy, Texas Appleseed, The Freedom BLOC, Virginia Citizens Consumer Council, Virginia Poverty Law Center, and 20/20 Vision.
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