Here’s how the GENIUS Act will deliver the much-needed regulatory clarity that the stablecoin market is craving. Yet today, the IRF is on the verge of collapse. Not because of inherent flaws in its core design, but because of a legislative avalanche: 122 proposed amendments. It’s not only limited to stablecoins anymore. This has the potential to turn into a Trojan Horse that transforms huge swaths of the financial landscape, and not for the better.

Unforeseen Ripple Effects Loom Large

Think of it like this: you're trying to build a bridge (stablecoin regulation), but suddenly, everyone wants to tack on additions – a toll booth adjustment here, a detour for electric cars there, a completely new lane for horse-drawn carriages! Each one on its own may seem sensible to someone but together, they threaten to take down the whole building.

The Durbin-Marshall amendment, for instance, would address both the high level of credit card interchange fees. Sounds consumer-friendly, right? Consider the unintended consequence: reduced revenue for credit card issuers. This could lead to:

  • Higher annual fees.
  • Reduced rewards programs (goodbye cashback and airline miles!).
  • Tighter credit standards, making it harder for ordinary Americans to access credit.

Is that really the goal here? Instead, we appear to be solving one problem by creating three more. This isn't about defending Visa and Mastercard. It's about recognizing that these amendments are blunt instruments with the potential to hurt the very people they claim to protect.

Price Controls? Seriously Bad Idea

The Hawley-Sanders amendment aims to limit credit cards to a maximum APR of 10%. This is the part where the stablecoin bill begins to look like a Soviet-era 5-Year Plan. As economics teaches us, price controls are a bad idea that never work in the long run. They kill innovation, impose anti-competitive barriers, and eventually create shortages and black markets.

Picture this though, a world where credit card companies act recklessly. They won’t even issue cards to people they deem “high risk,” because the capped APR is not worth the risk of their losses. Who gets hurt the most? Those with lower credit scores, the very Americans who need access to credit to re-establish themselves financially.

We need to learn from history. Price controls have been attempted and rejected innumerable times in this country alone. Injecting them into a stablecoin bill is pure oil and water – an explosive combination that will only undermine our financial system. It's a terrifying precedent. Once we begin imposing these kinds of controls on the price of credit, where does it stop? Mortgages? Car loans? This isn’t simply a question of stablecoins, but rather the very free market principles that undergird free markets.

Innovation Suffocated In The Crib?

The tech sector, from Apple to Google, recognize that stablecoins have the ability to radically change payments and reduce transaction costs substantially. Even more conventional financial institutions are testing their feet in the waters. The GENIUS Act, in its original form, would have offered the kind of regulatory certainty that is required to open the door to this type of innovation.

The bill has 122 amendments that would make the bill an almost immediate regulatory quagmire. That would squash life-saving innovation in its cradle. Companies may just conclude that the regulatory burden is too great and move their innovation to other locales. Are we truly prepared to let other countries take the lead in this most strategically important area?

CFPB Director Rohit Chopra’s fears over the evident connections between stablecoins and the larger, more opaque traditional financial sector are well-founded. Yet, his concerns should not serve to provide cover for arbitrary regulations that would strangle the blossoming industry in its crib. We require a measured solution, a fair one that prioritizes consumer protections without hindering innovation.

The actual risk The true danger is not that the stablecoin bill will simply not pass. No, it’s that it will pass in a mangled, unrecognizable form that’s full of unintended consequences and anti-environmental amendments. This tale is an important cautionary tale about the perils of legislative overreach. It’s a reminder of our duty to carefully weigh the future impacts of our choices. So, let’s encourage our senators to get to it! They need to focus on a measured and targeted approach to stablecoin regulation that fosters innovation and protects consumers without threatening the stability of our financial system in the process. It's time to stop the legislative madness before it's too late.