TLDR:
- Senator Elizabeth Warren has withdrawn support for the GENIUS Act stablecoin legislation
- Warren cites concerns over a $2 billion deal between Trump-backed World Liberty Financial and UAE-based MGX
- USD1 stablecoin, co-founded by Eric Trump, has surged to become the 7th largest stablecoin
- 10 US senators have withdrawn their support for the GENIUS Act
- The bill is expected to receive a floor vote this week despite growing opposition
The Trump administration’s push for stablecoin legislation has hit a roadblock as Senator Elizabeth Warren leads opposition against the GENIUS Act over what she describes as potential corruption concerns.
The Massachusetts Democrat is urging fellow senators to reject the bill due to President Trump’s connections to the USD1 stablecoin issued by World Liberty Financial.
World Liberty Financial, co-founded by Eric Trump and crypto investor Zach Witkoff, recently saw its USD1 stablecoin surge in value. The token is now ranked as the 7th largest stablecoin in a market that exceeds $245 billion in circulation.
At the center of Warren’s concerns is a deal between World Liberty Financial and MGX, an Emirati firm backed by Abu Dhabi’s sovereign wealth. The arrangement will see USD1 serve as the settlement currency for MGX’s $2 billion investment into Binance, the global crypto exchange.
Warren took to social media to express her disapproval.
“The Trump family stablecoin surged to 7th largest in the world because of a shady crypto deal with the United Arab Emirates—a foreign government that will give them a crazy amount of money,” she wrote.
The senator has been vocal about her opposition to the GENIUS Act, formally known as the Guiding and Establishing National Innovation for US Stablecoins Act. She attempted to amend the bill to prohibit stablecoins used in crimes and impose oversight on foreign firms, but her proposals were defeated.
Political Fallout
The controversy has led to a shift in support for the legislation. Ten US senators have withdrawn their backing for the GENIUS Act over concerns about its lack of anti-money laundering and national security protection rules.
Four senators who previously supported the bill in committee now say they will oppose it in its current form. In a joint statement, they cited “numerous issues that must be addressed,” including national security risks and insufficient oversight of foreign issuers.
Warren has been direct in her criticism, stating that the bill would “make it even easier for the president and his family to profit off their own stablecoin and oversee their own financial company.”
When questioned about potential conflicts of interest, President Trump 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 president has defended his crypto push by framing it as a geopolitical race, saying, “If we don’t do it, China’s going to,” and claiming millions of Americans support it despite earlier opposition from the Biden administration.
Impact on World Liberty Financial
The political turmoil surrounding the GENIUS Act could have major implications for World Liberty Financial. The company has reportedly put a pause on plans for centralized exchange listings, waiting for regulatory clarity before proceeding.
This delay may hurt USD1’s competitive position against industry leaders like Tether. David Sacks, a supporter of the Trump administration, had previously expressed optimism that the GENIUS Act would scale all legislative hurdles and receive final assent in May, but enthusiasm has waned.
The bill sponsored by Senator Bill Hagerty passed the Senate Banking Committee in March with bipartisan support and is expected to receive a floor vote this week despite the growing opposition.
Warren has urged all senators to vote against the bill unless it includes stronger safeguards. “If we do not fix this bill,” she said, “then every senator must vote no—or risk aiding and abetting Trump’s corruption.”
The stablecoin USD1 is backed by short-term U.S. Treasuries, similar to most tokens in the market. The announcement of the MGX deal came during a crypto convention in Dubai, where Witkoff appeared alongside Eric Trump.
