Senator Warren Withdraws Support for GENIUS Act Over Trump's Stablecoin Ties

Senator Elizabeth Warren has withdrawn her support for the GENIUS Act, a piece of legislation aimed at regulating stablecoins in the United States. Her opposition is rooted in concerns over President Donald Trump’s connections to the USD1 stablecoin, which has surged to become the seventh largest stablecoin globally. The USD1 stablecoin is backed by short-term U.S. Treasuries and was co-founded by President Trump’s son, Eric Trump, and crypto investor Zach Witkoff.

Warren’s concerns escalated following a deal between World Liberty Financial (WLFI), the company behind USD1, and UAE-based MGX. The arrangement involves using USD1 as the settlement currency for MGX’s $2 billion investment into Binance, the global cryptocurrency exchange. Warren has publicly criticized this deal, describing it as “shady” and potentially corrupt. She has urged the Senate to reject the GENIUS Act, stating that it could facilitate such corruption.

The GENIUS Act initially enjoyed bipartisan support in Congress. However, the landscape has shifted dramatically with at least ten senators now withdrawing their backing for the legislation. These lawmakers cite various concerns, including what they perceive as insufficient anti-money laundering protections and national security safeguards. The bill, sponsored by Senator Bill Hagerty, passed the Senate Banking Committee in March but now faces an uncertain future.

Warren attempted to amend the bill to prohibit stablecoins used in criminal activities and impose stricter oversight on foreign firms. Her proposals were defeated, prompting her to warn that “every senator must vote no—or risk aiding and abetting Trump’s corruption.” President Trump, when questioned about potential personal gain from crypto legislation, responded, “I haven’t even looked,” adding, “If I own stock in something and I do a good job and the stock market goes up, I guess I’m profiting.”

The political turmoil surrounding the GENIUS Act has real-world consequences for WLFI and its USD1 stablecoin. The company has reportedly paused plans for centralized exchange listings, waiting for regulatory clarity before proceeding. This delay may impact USD1’s competitive position against established players like Tether in the global stablecoin market. Most tokens in this space are backed by short-term U.S. Treasuries and other real-world debt instruments.

Warren has framed the issue as a broader concern about presidential ethics. “This is a bill that would make it even easier for the president and his family to profit off their own stablecoin and oversee their own financial company,” she stated. President Trump has defended his crypto initiatives as necessary for American competitiveness, saying, “If we don’t do it, China’s going to,” and claiming millions of Americans support these efforts despite opposition from the previous administration.

The developing situation underscores the challenges of creating regulatory frameworks for emerging technologies like cryptocurrency when political and financial interests intersect. The GENIUS Act’s fate remains uncertain as it heads toward a potential floor vote in the coming days.