Why the GENIUS Act Could Unlock CBDC Surveillance Without Creating One

For many, the passage of the GENIUS Act closed the doorways on the creation of a Central Bank Digital Currency (CBDC). Stablecoins, although digital, had been marketed as a personal type of foreign money, in distinction to a government-issued digital greenback.

Aaron Day, a fellow at the Brownstone Institute and a staunch critic of the crypto trade, argued that the GENIUS Act facilitates elevated authorities surveillance regardless of this ban.

Surveillance Concerns Under the GENIUS Act

The GENIUS Act explicitly prevents the Federal Reserve from issuing a CBDC on to people or via a 3rd celebration. Its objective was to dam the creation of a government-issued digital greenback in any respect prices.

Its July 2025 passage tied in properly with President Trump’s early marketing campaign guarantees to oppose the creation of a CBDC, describing it as a form of tyranny. 

According to Day, stablecoins and CBDCs are basically the similar factor. The solely distinction is that the former is privately issued, whereas the latter is issued by a central bank. Yet, so long as the authorities is concerned, the diploma of surveillance stays the similar.

“The issuance by the Federal Reserve will not be truly the a part of this that individuals are involved about. The Federal Reserve is a personal group that is a collection of banks. Whether you find yourself having a stablecoin issued by Jamie Dimon at JP Morgan Chase or by the Federal Reserve doesn’t matter,” Day advised BeInCrypto.

What privacy-preserving people are actually involved about, he argued, is a authorities entity being able to program, track, and censor money. 

This line of considering has prompted him to outline the GENIUS Act as a “backdoor CBDC.” Day highlighted the urgency of the difficulty, particularly given the exponential progress in stablecoins.

“Last yr, there was $33 trillion value of stablecoin transactions. Globally, that is bigger than the quantity processed via Visa,” he stated, including, “What they’ve carried out basically is that they’ve taken stablecoins… and so they put [them] below the surveillance and management of Congress.”

According to him, this degree of surveillance already existed earlier than the passage of the GENIUS Act. The just lately signed invoice solely represents a brand new diploma to an already established order.

Government Surveillance Tools Already In Place

Day famous that almost all of the greenback is already digital.

When requested for examples, he pointed to the Bank Secrecy Act (BSA). This laws, handed in 1970, requires monetary establishments to help authorities companies in detecting and stopping cash laundering, terrorism financing, and different illicit actions.

According to Day, the BSA permits authorities companies to have interaction in overreach in sure contexts.

“We have one thing known as suspicious exercise stories. Anytime you do a monetary transaction via your financial institution higher than $10,000, a report is mechanically generated and despatched to the Treasury Department. This reveals you that we have already got monitoring inside the system,” he stated.

While these instruments are sometimes used for public safety, authorities companies can implement them with out particular authorization.

Day pointed to a selected instance. In March 2025, the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury Department, issued a geographic concentrating on order to fight cash laundering actions in the southwest border of the United States. 

As a part of that order, FinCEN mandated that cash companies companies in 30 ZIP codes report transactions over $200.

“Understand what this implies. The Treasury Department, with out Congress, and not using a invoice, and not using a legislation, can merely ship a memo and banks will begin adjusting the greenback transaction quantity with which they begin mechanically reporting to Treasury,” he stated.

In gentle of those examples, he argued that surveillance frameworks exist already. The GENIUS Act merely permits Congress to oversee stablecoins, doubtlessly increasing management over digital currencies in ways in which mirror these of a CBDC.

The submit Why the GENIUS Act Could Unlock CBDC Surveillance Without Creating One appeared first on BeInCrypto.