Amundi Warns GENIUS Act May Undermine Dollar's Global Dominance

Amundi, a prominent European asset management firm, has expressed concerns about the potential consequences of the GENIUS Act, a bill recently passed by the Senate aimed at regulating stablecoins. The firm warns that while the act seeks to bring stability and oversight to the rapidly growing market of dollar-backed digital currencies, it could inadvertently undermine the U.S. dollar's global dominance and disrupt the international payment system.

The GENIUS Act, which stands for "Guaranteeing Economic Stability and Oversight of Stablecoins," aims to establish a regulatory framework for stablecoins, ensuring they are backed by sufficient reserves and subject to stringent oversight. However, Amundi's analysis suggests that the act's provisions could have unintended repercussions. The firm's concerns center around the potential for the act to destabilize the global payment system, which has long relied on the U.S. dollar as a stable and trusted medium of exchange.

Amundi's warning comes at a time when stablecoins are gaining traction as a means of facilitating cross-border transactions and providing a stable store of value in volatile markets. The firm emphasizes that overly permissive stablecoin policies, particularly those that allow for interest-bearing features, could exacerbate the risks to the global financial system. Amundi suggests that such policies could lead to a proliferation of stablecoins that are not adequately backed by reserves, potentially causing a loss of confidence in these digital assets and, by extension, the U.S. dollar.

Amundi noted that stablecoin issuers could operate like banks, blurring the lines between tech firms and traditional financial institutions. This development could disrupt the financial system by drawing deposits away from traditional banks and into stablecoin platforms, potentially destabilizing the global payment system.

The act’s requirement for full collateralization may drive more investment into US Treasury bonds. This could increase bond demand while signaling that the dollar needs support. That perception may impact investor confidence in the dollar’s strength. While supporting digital finance, the act could also add strain to the global financial order.

Proponents believe the act offers clarity for tokenized finance. It helps create a compliant environment for platforms using real-world assets. These include real estate, trade finance, and sukuk markets. The regulation may enable secure and on-chain settlement systems. Analysts say this could unlock more institutional participation in tokenization.

Supporters view the bill as a key step for digital asset innovation. Critics point to risks of financial fragmentation. The rise of “quasi-banks” through corporate stablecoins may reshape market roles. Global coordination on regulation remains limited. This raises concerns about uneven oversight across regions.

The GENIUS Act could redefine digital dollar usage in global trade. Its full impact depends on how firms and markets respond. As the House considers the bill, global stakeholders are watching closely. The balance between innovation and stability remains a central issue.