Opinion: The Genius Act guarantees priority for stablecoin holders, and Bank of America may "pay for it"

Banks and the legal community are watching the passage of the Genius Act by the US Senate, which could put traditional banks and other customers at risk by giving stablecoin holders preferential claims on their backed assets in the event of bankruptcy.
Adam Levitin, a law professor at Georgetown University, warned that such an arrangement would essentially "subsidise stablecoin issuance at the expense of bank deposits" and could harm ordinary bank customers, especially if the stablecoin issuer or its custodian bank goes bankrupt. The current version of the bill requires stablecoins to be backed by highly liquid assets such as US Treasury bonds, issuers to disclose their reserves on a monthly basis, and the ability to freeze tokens. If passed, banks and other entities would be able to issue compliance stablecoins.
The bill is currently awaiting consideration in the US House of Representatives. Although it is designed to enhance user confidence and strengthen the connection between stablecoins and the real financial system, its design of bankruptcy handling priorities has also triggered discussions on regulatory logic, financial stability and the potential distribution of benefits between banks. Industry insiders say the bill could be a turning point for the development of stablecoins, while also heightening concerns about the impact of the traditional financial system.