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Why GENIUS Act Could Lead to CBDC-Like Surveillance

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Why GENIUS Act Could Lead to CBDC-Like Surveillance

For many, the passage of the GENIUS Act closed the doors on the creation of a Central Bank Digital Currency (CBDC). Stablecoins, though digital, were marketed as a private form of currency, in contrast to a government-issued digital dollar.

Aaron Day, a fellow at the Brownstone Institute and a staunch critic of the crypto industry, argued that the GENIUS Act facilitates increased government surveillance despite this ban.

Surveillance Concerns Under the GENIUS Act

The GENIUS Act explicitly prevents the Federal Reserve from issuing a CBDC directly to individuals or through a third party. Its goal was to block the creation of a government-issued digital dollar at all costs.

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

According to Day, stablecoins and CBDCs are essentially the same thing. The only difference is that the former is privately issued, whereas the latter is issued by a central bank. Yet, as long as the government is involved, the degree of surveillance remains the same.

“The issuance by the Federal Reserve is not actually the part of this that people are concerned about. The Federal Reserve is a private organization that is a collection of banks. Whether you end up having a stablecoin issued by Jamie Dimon at JP Morgan Chase or by the Federal Reserve doesn’t matter,” Day told BeInCrypto.

What privacy-preserving people are really concerned about, he argued, is a government entity being able to program, track, and censor money

This line of thinking has prompted him to define the GENIUS Act as a “backdoor CBDC.” Day highlighted the urgency of the issue, especially given the exponential growth in stablecoins.

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“Last year, there was $33 trillion worth of stablecoin transactions. Globally, this is larger than the amount processed through Visa,” he said, adding, “What they’ve done essentially is they’ve taken stablecoins… and they put [them] under the surveillance and control of Congress.”

According to him, this level of surveillance already existed before the passage of the GENIUS Act. The recently signed bill only represents a new degree to an already established order.

Day noted that most of the dollar is already digital.

When asked for examples, he pointed to the Bank Secrecy Act (BSA). This legislation, passed in 1970, requires financial institutions to assist government agencies in detecting and preventing money laundering, terrorism financing, and other illicit activities.

According to Day, the BSA allows government agencies to engage in overreach in certain contexts.

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“We have something called suspicious activity reports. Anytime you do a financial transaction through your bank greater than $10,000, a report is automatically generated and sent to the Treasury Department. This shows you that we already have tracking within the system,” he said.

While these tools are often used for public protection, government agencies can implement them without specific authorization.

Day pointed to a specific example. In March 2025, the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury Department, issued a geographic targeting order to combat money laundering activities in the southwest border of the United States. 

As part of that order, FinCEN mandated that money services businesses in 30 ZIP codes report transactions over $200.

“Understand what this means. The Treasury Department, without Congress, without a bill, without a law, can simply send a memo and banks will start adjusting the dollar transaction amount with which they start automatically reporting to Treasury,” he said.

In light of these examples, he argued that surveillance frameworks already exist. The GENIUS Act merely allows Congress to supervise stablecoins, potentially expanding control over digital currencies in ways that mirror those of a CBDC.

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Crypto World

Bitcoin Rebounds 4% on Iran Ceasefire Hopes but Faces $72K Resistance

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Bitcoin Rebounds 4% on Iran Ceasefire Hopes but Faces $72K Resistance

Bitcoin (BTC) rose back above $71,000 during the early Asian trading hours on Wednesday after Trump’s administration offered a 15-point plan to Iran to end the war, sparking short-term optimism across risk assets.

Key takeaways:

  • Bitcoin bounces 4% to $71,500 after President Trump sent Iran a 15-point proposal aimed at ending the war. 

  • Bitcoin faces stiff resistance above $72,000. 

Bitcoin jumps 4% on ceasefire hopes

Data from TradingView showed BTC price rose as much as 4% to an intraday high of $71,300 from Tuesday’s low of $68,890, recouping all the losses incurred the day prior.

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

The price reacted to news that the US, through the primary intermediary Field Marshal Syed Asim Munir (Pakistan’s Chief of Army Staff), has sent Iran a 15-point plan aimed at ending the war.

The key elements of the plan include: a temporary ceasefire with calls on Iran to dismantle or severely limit its nuclear program, suspend its ballistic-missile work, and the full reopening of the Strait of Hormuz for safe maritime traffic.

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Source: X/The Kobeissi Letter

Meanwhile, Iran continues to deny any ongoing talks as ​​Trump delayed his self-imposed deadline for Tehran to reopen the Strait of Hormuz.

Following the news, WTI crude oil dropped 5.75% to $87 per barrel, while Brent crude shed 6% to trade at $98.

Oil prices table. Source: Oil Price.com

Gold extended yesterday’s gains, now up 2.53% on the day to trade at $4,561 at the time of writing.

This move eases inflation fears tied to disrupted shipping through the Strait of Hormuz, positively impacting risk assets, including Bitcoin.

Analysts noted the swift repricing, with Coinlore saying that Bitcoin is now acting as a “real-time sentiment instrument for global risk.”

CryptoQuant analyst Axel Adler Jr said that BTC will “likely remain headline-driven” until the US and Iran send a “public de-escalation signal.”

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Bitcoin price faces “rough times ahead”

Despite the rebound, BTC’s upside appears to be capped at $72,000, where the 50-day exponential moving average (EMA) and the upper trend line of a symmetrical triangle converge.

A break above $72,000 would confirm a bullish breakout from the triangle, toward the measured target at $92,400, 30% above the current price.

BTC/USD daily chart. Cointelegraph/TradingView

Glassnode’s cost-basis distribution heatmap reveals concentrated supply and resistance between $72,000 and $74,000, where investors acquired roughly 380,000 BTC over the last 30 days. This indicates that sellers could aggressively defend this zone.

Bitcoin cost basis distribution heatmap. Source: Glassnode

On the downside, a dense accumulation cluster sits around $65,000, where investors previously acquired 160,000 BTC. 

This level coincides with the lower trend line of the symmetrical triangle, which, if lost, could trigger the next leg lower toward the bearish target of the triangle at $52,500.

Meanwhile, Capriole Investment’s Bitcoin Macro index has dropped to -1.37, levels seen at the depth of previous bear cycles.

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The chart below shows that the metric historically spends a year at or below these valuations before recovering.

“Bitcoin Macro index is in the value zone,” Capriole Investments founder Charles Edwards said in an X post on Wednesday, adding:

“In all prior instances, price went lower into deeper value first before recovering, suggesting we may have more rough times ahead first.”

Bitcoin Macro Index. Source: Capriole Investments

As Cointelegraph reported, traders warn of a second bear flag breakdown that could clear the path for another sell-off below $50,000.