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For many, the passage of the Genius Act closed the doors to the creation of a central bank digital currency (CBDC). Stablecoins, although digital, have been marketed as a private form of currency, unlike the government-issued digital dollar.
Aaron Day, a researcher at the Brownstone Institute and a vocal critic of the crypto industry, argued that the Genius Act facilitates increased government surveillance despite this ban.
Oversight Boards under the GENIUS Act
The Genius Act clearly states that the Fed is not From the issuance of the CBDC coin Directly to individuals or through a third party. Their goal was to prevent the creation of a government digital dollar at all costs.
Its passage in July 2025 fits well with the first campaign of President Trump who promises to oppose the creation of a CBDC currency, calling it. As a kind of tyranny.
Dai stated that stablecoins and central bank digital currencies are fundamentally similar. The only difference is that the first is issued privately, while the last Issued by a central bank. However, as long as the government is involved, the degree of oversight remains the same.
Dai told beincrypto that the Fed release is not the part that people are really worried about. The Federal Reserve is considered a private organization It is a group of banks. Whether you get a stablecoin issued by Jamie Dimon at JPMorgan Chase or the Federal Reserve doesn’t matter.
Day explained that what really worries people who care about privacy is the possibility of a government entity Programming, tracking and monitoring of funds.
This line of thinking led him to define Genius as a “CBDC backdoor”. Dai stressed the importance of the issue, especially with the explosive growth in stablecoins.
Last year saw $33 trillion in stablecoin transactions, he said. Worldwide, this is greater than the amounts processed through Visa,” he said. “Basically, what they did was they took stablecoins … and put them under the oversight and control of Congress.”
He points out that this level of surveillance already existed before the Genius Act. The law just signed represents only a new degree of a pre-existing system.
Day said most dollars are already digital.
When asked for examples, he pointed out: Bank Secrecy Act (BSA). This legislation, passed in 1970, requires financial institutions to assist government agencies in the detection and prevention of money laundering, terrorist financing and other illegal activities.
According to Day, the BSA allows government agencies to exercise discretion in certain contexts.
Day said there are what are called suspicious activity reports. Every time you make a financial transaction through your bank that exceeds $10,000, a report is automatically generated and sent to the Department of the Treasury. This shows that we already have a track in the system.
These tools are often used to protect the public, but government agencies can apply them without specific authorization.
Day pointed to a specific example. In March 2025, it was released FinCEN (Financial Crimes Enforcement Network)an office of the US Treasury Department, issued a geo-targeting order to combat money laundering operations in the southwestern border of the United States.
As part of this order, FinCEN required money services companies in 30 zip codes to report transactions that exceed $200.
Understand what this means, Day said, the Department of the Treasury, without Congress, without a bill, without a law, can simply send a memo and the banks begin to adjust the amount of dollars of the transaction that is automatically reported to the Department of the Treasury.
In light of these examples, it is argued that monitoring frameworks already exist. The GENIUS Act only allows Congress to oversee stablecoins, which could expand control over digital currencies in ways similar to that of a central bank digital currency.
