NY Attorney General Warns Current Stablecoin Bills Lack Safeguards

- New York AG Letitia James warns that federal stablecoin bills lack sufficient consumer protections. - James proposes stricter measures, including bank-like regulation for issuers and Federal Reserve oversight. On July 1, 2025, The Block reported that New York Attorney General Letitia James warned lawmakers that proposed federal stablecoin legislation lacks adequate safeguards for consumers. She critiqued the Senate's Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act and the House's Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, stating that these bills require substantial strengthening to address the risks in the growing stablecoin industry. As part of her recommendations, James proposed regulating stablecoin issuers similarly to banks, calling for requirements such as deposit insurance to protect users. She also recommended that the Federal Reserve Board have supervisory authority over non-bank stablecoin issuers to ensure political independence. This is part of her broader advocacy for stablecoin oversight; in April, James warned Congress about the potential risks posed by foreign stablecoin issuers, particularly Tether, and urged lawmakers to "onshore" stablecoins to protect the U.S. dollar and Treasury markets. The Senate has already passed the GENIUS Act, which mandates that stablecoins be fully backed by U.S. dollars or equivalent liquid assets and requires annual audits for issuers with a market capitalization exceeding $50 billion. Meanwhile, the House Financial Services Committee approved the STABLE Act in May, and the bill now awaits a vote in the full House. President Trump has stated that he plans to sign stablecoin legislation by August, indicating a clear federal commitment to regulating the sector. According to market data, as of July 1, 21:14 UTC, Tether USDt (USDT) was trading at $1, with a 0.0% change in 24-hour trading volume.