Rep. Warren Davidson warned this week that the United States is moving toward a financial system that would be licensed, permissioned and heavily monitored — a change he says would undercut the original promise of permissionless, private money. He used social posts to flag the concern and urged colleagues to rethink how new rules for stablecoins and digital IDs are written. Lawmakers Flag The GENIUS Act The debate centers on the GENIUS Act, a federal bill that creates a framework for payment stablecoins and related services. Based on reports, the GENIUS Act (S.1582) established rules that would let certain nonbank firms issue payment stablecoins under federal supervision. The bill’s text and summaries show it aims to clarify who can issue these tokens and how they must operate. Critics say the technical design could let a government or bank-backed system run like a wholesale CBDC. What’s going on in crypto? Flat or declining markets. Definite vibe shift… A few thoughts. Markets have stalled, in my opinion, because the disintermediation use case has been effectively destroyed in America. An account-based industry offers no distinct advantage over the… — Warren Davidson (@WarrenDavidson) December 31, 2025 Privacy Fears And Legislative Pushback According to Davidson’s posts, the problem is not stablecoins themselves but how the rules could be used to build a backend that behaves like a digital dollar under tight control. He warned that an account-based model tied to digital identity could let authorities track or limit transactions. Reports have also pointed to other bills and votes going through Congress that influence this debate, and Davidson has a record of pushing anti-surveillance measures such as legislation related to banning programmable CBDCs. A History Of Bills And Statements Davidson is not alone in raising alarms. Other members of Congress have questioned how new laws might reshape custody, banking roles, and who gets to issue digital money. Some lawmakers argue that clearer rules will attract banks and bring consumer protections, while opponents say those same rules could shift economic power to large financial firms and make everyday payments more traceable. Public records show hearings and committee activity on digital payments and CBDC consequences were held in 2025 as Congress weighed these policies. What Comes Next For Crypto Policy Based on reports, the fight over stablecoin structure and digital identity is likely to continue on Capitol Hill and in public comment periods. Supporters of federal clarity say predictable rules lower risk for users and for the financial system. Critics like Davidson say that predictability should not come at the cost of personal privacy or the right to self-custody. Media outlets covering the story note that the debate spans policy, technology and civil liberties, and that lawmakers will face pressure from banks, tech firms, the crypto industry and privacy groups. Featured image from Pexels, chart from TradingView
