President Trump Signs Crypto Bill Exposing Consumers to Huge Financial Risks

July 21, 2025 — Press Release

GENIUS Act’s Blessing of “Stablecoins” Heightens Risks of Fraud, Privacy Violations, and Risks to Consumer Funds

WASHINGTON – Last week, the U.S. House of Representatives passed and President Trump signed a perilous crypto-related bill that could increase fraud, expose consumer funds to dangerous risks, and increase the market dominance and privacy risks posed by tech and retail giants like Amazon, Walmart, Meta (Facebook), Apple and X. The GENIUS Act, short for Guiding and Establishing National Innovation for U.S. Stablecoins (S. 1582), exposes working people and the financial marketplace to extraordinary risk. 

“Under the guise of promoting innovation and competition, Congress has opened up the door to new predatory conduct and risks to the banking system that will put working families at risk of fraud and massive losses. The GENIUS Act will promote the use of unstable ‘stablecoins’ by retail giants like Amazon and as a dangerous form of funds under a weak and loophole-riddled supervision regime that is woefully insufficient to protect consumers,” said Carla Sanchez-Adams, senior attorney at the National Consumer Law Center. “Consumers who interact with stablecoins need protection from fraud, theft, and risks to their funds, but this bill offers no guarantee of consumer protections. Safeguards must be in place to address both the conventional and the novel risks associated with these crypto assets.”

A stablecoin is a crypto-asset whose value is purportedly pegged to the dollar or some other fiat currency, asset, or group of assets. But stablecoins are actually inherently unstable and may not be as closely tied to the stable asset as represented. The instability of stablecoins can also disrupt the stability of traditional banking, as occurred with Silicon Valley Bank.

The GENIUS Act allows nonbanks to offer uninsured stablecoins without the essential safeguards provided by federal deposit insurance and other regulations governing FDIC-insured banks. Amazon, Walmart and other firms are reportedly exploring issuing their own stablecoins, a move that the former Securities and Exchange Commission Secretary-General warns may pose a negative impact on consumers and small businesses. The GENIUS Act makes it easier for these retail companies and tech giants like Meta (Facebook) and X to issue their own stablecoins without complying with laws that separate banking and commerce to prevent conflicts of interest, economic concentration, and risk of collapse. Allowing use of stablecoins in these settings gives firms access to their customers’ private financial data, enables them to have a private banking system, and increases their market dominance. The Act provides little protection for consumers from failed stablecoins.

The GENIUS Act also has ambiguous provisions that could limit states from applying some consumer protections to stablecoins issued out-of-state. Another provision might pose some limits on state authority over traditional money transmission activities in fiat currency by subsidiaries of uninsured banks, such as those chartered in states like Wyoming.

Last week the House also passed an even more dangerous crypto bill, the H.R. 3633, the Digital Asset Market Clarity Act of 2025 (“CLARITY Act”). That bill now heads to the Senate for consideration. The CLARITY Act legitimizes risky and exploitative crypto industry practices. The bill has massive exemptions for a wide swathe of the industry, essentially amounting to a get-out-of-jail-free card for many risky crypto products and practices. 

“There is no clarity on which – if any – consumer protection laws on payments will apply to protect consumers who fall prey to crypto fraud and scams,” Sanchez-Adams said. “These bills benefit only crypto-billionaires and large corporate actors while exposing ordinary consumers to incredible risk with no protection.” 

Related Resources

• Coalition Letter: ‘‘Stablecoin Transparency and Accountability for a Better Ledger Economy Act of 2025’’ or the ‘‘STABLE Act of 2025’’
• Coalition Letter, H.R. 3633, Digital Asset Market Clarity Act of 2025
• AFR Factsheet on the GENIUS Act’s Flaws and Failures
• AFR Factsheet on the Clarity Act: A Cash Grab That Is a Consumer Catastrophe