By Steve Diminuco

Vice President JD Vance has it exactly right: the United States must pass the GENIUS Act, and it must do so without delay. Every day this bill remains sidelined, the United States cedes ground to a strategic adversary that has made no secret of its ambition to replace the U.S. dollar as the world’s reserve currency.

The GENIUS Act creates a straightforward framework allowing American firms to issue dollar-backed stablecoins. These are digital dollars fully backed by U.S. cash and short-term Treasury bonds. They can be used globally, just like dollars today, but in a faster, more modern format that works in the digital economy. 

The GENIUS Act would strengthen the dollar by requiring every digital token to be backed by real U.S. assets. When more people use stablecoins, more dollars and Treasuries must be held in reserve. It’s a clean way to deepen global reliance on American money and debt without printing more of either.

But the clock is ticking. China’s new stablecoin and digital currency law takes effect this summer. Beijing has made it clear that it wants the Chinese yuan, not the U.S. dollar, to be the go-to currency for international trade and digital payments. Stablecoins are the next frontier in the currency wars, and China is racing to seize first-mover advantage. If the U.S. lets China get there first, it will one day be viewed as a historic mistake.

This would have real-world consequences for our national defense. The strength of the U.S. military is underwritten by the strength of the dollar. Global demand for Treasuries helps finance our defense spending without massive tax increases. The dollar’s role in global finance gives us unmatched sanctioning power. It keeps our supply chains flowing and allows us to pressure rogue states without firing a shot. If China replaces the dollar in critical parts of the world with its own digital alternatives, those tools start to break. Our sanctions become weaker. Our alliances become harder to maintain. Our ability to respond quickly in a crisis diminishes.

This is why the GENIUS Act is so vital. It allows U.S. companies to issue safe, fully backed digital dollars under clear rules. It sets strict requirements that stablecoins must be redeemable 1:1 for U.S. dollars and backed entirely by cash and Treasuries, ensuring that the U.S. remains ahead of China in the digital payment revolution.

But some members of Congress are acting to slow-roll or even kill the legislation. They are doing so by floating a flurry of amendments to the bill that have nothing to do with stablecoins.

So far, one of the most worrisome of the bunch (at least for the prospects of quick passage of the GENIUS Act) is Sen. Josh Hawley’s (R-MO) amendment to cap credit card interest rates (based off the bill he introduced with Sen. Bernie Sanders [I-VT], which many members of Congress oppose). It’s worth noting that Sen. Hawley is vehemently opposed to the GENIUS Act and said that he will vote against it. Another is Sen. Roger Marshall’s (R-KS) proposal to add his Credit Card Competition Act to the bill, which political analysts have labeled as a giveaway to big-box stores. In fact, Sen. Thom Tillis (R-NC) has already stated that he will vote against the GENIUS Act if Sen. Marshall adds his amendment.

While these measures can receive congressional consideration as standalone bills at another time, they are completely unrelated to the stablecoin conversation in question and should not hold up its passage. As aforementioned, China’s stablecoin legislation goes into effect in August, which is why Congress and the Trump administration are pushing for the legislative branch to pass the GENIUS Act this summer. That won’t happen if the bill is complicated with unrelated amendments.

China’s timeline is measured in weeks, not months. If Congress fumbles the ball here, America will pay the price for years to come.

The dollar is more than just the United States’ currency. It’s the foundation of American power. And in today’s world, defending it means embracing the tools of tomorrow. Let’s get this done before Beijing beats us to it.

Steve Diminuco is a former Deputy Director for Global Intergovernmental Affairs and Senior Conferences Coordinator at the U.S. Department of State.

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