Amundi the largest asset manager in Europe warns about worldwide economic instability that may result from the U.S. GENIUS Act which aims to control dollar-backed stablecoins. The legislation has the potential to create financial disruptions because it would speed up the process of dollarization in non-U.S. economies.
Vincent Mortier from Amundi describes the GENIUS Act as either brilliant or wicked. The widespread adoption of digital tokens pegged to the U.S. dollar threatens to disrupt worldwide payment systems while undermining monetary independence of developing nations.
The GENIUS Act received Senate approval last month and now awaits House approval before reaching President Donald Trump for signature. The law forces stablecoins to maintain full backing by U.S. dollars which creates concerns about capital movement toward U.S. Treasuries and away from domestic financial systems.
JPMorgan predicts that stablecoin circulation will reach $500 billion within a few years yet other estimates suggest it could reach $2 trillion. The majority of stablecoins operate with dollar backing and most transactions happen outside U.S. territory.
The Italian finance minister considers this policy to be more dangerous for European financial stability than trade disputes. The concern exists that digital dollar access could damage national currencies and reduce central bank control throughout international borders.
