Democrats have pushed back against proposed legislation to regulate stablecoins—digital currencies pegged to real-world assets like the U.S. dollar—arguing the risks are being understated.

The GENIUS Act aimed to set standards for reserve backing, redemption rights, and consumer protections, but critics like SEC Commissioner Caroline Crenshaw warn that most stablecoins operate through lightly regulated exchanges and pose significant financial risks.

Supporters say the bill would promote innovation while improving safety, likening stablecoin reserves to those required of traditional banks, CNBC has reported.

Written by B.C. Begley