US Stablecoin Bill Sparks Debate: Privacy Concerns Mount Over CBDC Surveillance Risks

A legislative proposal aimed at clarifying the regulatory landscape for stablecoins in the United States is encountering substantial opposition, with critics contending it could inadvertently serve as a conduit for extensive government financial surveillance. This contention posits that the proposed framework, despite its stated focus on stablecoin oversight, incorporates features strikingly similar to those found in a Central Bank Digital Currency (CBDC), thereby raising significant concerns about privacy and control over digital financial transactions.

• The GENIUS Act is a proposed legislative framework for stablecoin regulation in the U.S.
• Critics, including Congresswoman Marjorie Taylor Greene, characterize the act as a “Trojan horse” for government financial surveillance.
• Concerns center on the bill’s potential to introduce centralized control mechanisms akin to a CBDC.
• Revisions introduced in March 2025 include stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.
• Industry experts and privacy advocates fear these provisions could erode financial privacy and decentralization.

Political Opposition and the “Trojan Horse” Analogy

Among the prominent voices sounding this alarm is U.S. Congresswoman Marjorie Taylor Greene. She has explicitly labeled the GENIUS Act a “Trojan horse,” asserting that while it is presented as a stablecoin regulatory framework, its underlying provisions could effectively enable a state-backed digital currency with pervasive surveillance capabilities. Greene articulated her view on X, stating, “This bill regulates stablecoins and provides for the backdoor Centralized Bank Digital Currency.” Her concern focuses on the bill’s potential to introduce control features typically associated with government-issued digital currencies, rather than merely fostering clarity for privately issued stablecoins.

Widespread Skepticism within the Cryptocurrency Community

This skepticism extends beyond political figures, resonating deeply within the broader cryptocurrency community. Experts and industry leaders echo fears that the GENIUS Act threatens the fundamental ethos of decentralization that underpins digital currencies. Economist and author Saifedean Ammous, widely known for “The Bitcoin Standard,” has observed that the U.S. dollar already functions as a digital token tracked by the government, implying that further digital control via stablecoin regulation could merely intensify existing surveillance. Similarly, Jean Rausis, co-founder of Smardex, emphasized that centralized control over stablecoins translates directly to control over financial transactions, enabling authorities to freeze assets, reverse payments, and track spending—functions nearly identical to those possible with CBDCs. For many proponents of digital autonomy, the concepts of privacy and financial freedom are non-negotiable principles.

Revisions and Enhanced Surveillance Capabilities

The GENIUS Act has undergone several revisions, with significant updates introduced in March 2025. These revisions have incorporated more stringent Anti-Money Laundering (AML) obligations, Know Your Customer (KYC) requirements, and sanctions compliance mandates. While proponents argue these measures are essential to prevent illicit financial activities and bolster national security, critics contend they amount to invasive financial surveillance. Under these proposed requirements, stablecoin issuers would be obligated to collect and share extensive customer information, track all transactions, and potentially suspend payments upon regulatory directive without providing reasons to the transacting parties. This level of data collection and transaction oversight is perceived by many within the digital asset sector as a significant encroachment on financial privacy.

Global Context and the Future of Digital Finance

The concerns articulated in the U.S. are set against a backdrop of global developments in digital currencies, including active CBDC initiatives in regions such as China and the European Union. Critics fear that by ostensibly supporting innovation and regulatory clarity, the GENIUS Act could subtly steer the United States onto a similar path of heightened financial control, albeit under the guise of stablecoin regulation. This perspective highlights a fundamental tension between the pursuit of regulatory certainty for digital assets and the preservation of individual financial privacy and autonomy. The debate underscores the complex challenge of balancing innovation, national security, and civil liberties in the evolving landscape of digital finance.