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Wang Yongli, a former vice president of the Bank of China and the first Chinese mainland member of the SWIFT board, stated that American stablecoins legislation may inadvertently destroy the very industry it aims to regulate. In a lengthy analysis published on WeChat, Wang argued that the GENIUS Act, signed into law by President Donald Trump on July 18, contains the seeds of its own undoing. The legislation, he contends, will enable traditional banks to displace private stablecoin issuers by offering tokenized deposit products. Former BOC VP is critical of US stablecoin legislation  The GENIUS Act establishes America’s first federal framework for stablecoins, requiring issuers to maintain reserves equal to their tokens’ value in dollars or short-term Treasuries. The law mandates monthly audits and strict anti-money laundering compliance and prohibits stablecoin issuers from paying interest to holders, among other provisions. According to Wang, the introduction of legislation in that space has “not only increased demand for the US dollar and US Treasury bonds, strengthening the dollar’s international status, but also brought huge profits to the Trump family and their cryptocurrency associates.”  However, he stated that this brings “new challenges to the global monitoring of the dollar’s circulation and the stability of the traditional US financial system.”  One of those challenges, according to Wang, is the threat of the legislation itself to other jurisdictions.  He wrote, “The trading and transfer of crypto assets backed by dollar-denominated stablecoins has become a new and more difficult-to-prevent tool for the US to harvest global wealth, posing a serious threat to the monetary sovereignty and wealth security of other countries.” Wang also wrote about the potential of the legislation backfiring on stablecoins and their issuers. “Once crypto assets receive legislative regulation and compliance protection, banks and other financial institutions will undoubtedly participate fully,” he wrote,…

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Filed under: News - @ December 5, 2025 7:21 pm