Fed Governor Barr Urges Safeguards for GENIUS Act

Federal Reserve Governor Michael Barr warned on Tuesday that the implementation of new stablecoin regulations under the Guiding and Establishing National Innovation for United States Stablecoins Act, or GENIUS Act, must include strict safeguards to prevent financial instability and illicit activities.

Speaking at an event hosted by the Federalist Society, Barr acknowledged that the law, signed by President Trump on July 18, 2025, provides a federal framework that could accelerate the growth of stablecoins, which are digital assets pegged to the U.S. dollar and primarily used for cryptocurrency trading, cross-border remittances, and as a store of value in foreign markets. However, he emphasized that much depends on how regulators translate the legislation into enforceable rules, with agencies like the Federal Reserve, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and National Credit Union Administration currently developing guidelines ahead of a July 2026 deadline.

Barr highlighted the "long and painful history" of private money created without sufficient protections, drawing parallels to 19th-century free banking in the U.S., where bank notes...